All the roads lead to Yangon

 

Bordering India, China, Thailand and Bangladesh, with a population of about 60 million people who are hungry for just about everything, Myanmar is attracting the kind of investor interest never seen in six decades.

Since 2012, a number of foreign companies have paraded into Myanmar, establishing offices and representative offices, mostly in Yangon – the biggest commercial city. Activities were busy in 2013 when western nations’ sanctions were almost entirely lifted.

Big names range from chemical giant DuPont, insurance AIA Group to Bayer. Joining them are smaller firms based in the US and Japan to Australia like Korea’s Samsung, Japan’s Mitsubishi Electric, and Taiwan’s telecommunications carrier Chunghwa Telecom. Over 30 foreign banks have set up representative offices, waiting for full banking licences. Insurance companies have also opened offices where they could offer limited services, pending for full licences. 

 

They are following the footsteps of international aid organisations, which ranged from the United Nations, the World Bank to the International Committee of the Red Cross. Trade-related agencies of several countries like the US and India have also established offices to promote trade.

While DuPont is hopeful to meet the growing needs in agriculture, food, energy and environmental protection in the region, Japan’s internet company KDDI saw the growing demand for network construction, systems integration and IT support. With its office, Japan’s Aeon Microfinance looks to tap the financing demand. There was also a report that Aeon will soon expand its retailing business to the country.

When opening its representative office in March, global insurance broker Willis Group Holdings said political and economic reforms in Myanmar have fuelled a rise in demand for risk services and products, particularly in the infrastructure, construction, transportation, telecoms and energy sectors.

“Myanmar’s insurance industry is at a relatively early stage in its development, and we are proud to be the first of the larger global brokers with an office there. We hope Willis’s global expertise and experience will help in the development of a strong insurance industry,” said Adam Garrard, CEO of Willis Asia.

Similar optimism was also echoed by DuPont. 

“Myanmar has one of the fastest growing economies and a promising potential to advance Asean’s growth. Today’s office opening reflects our long-term commitment in helping meet the country’s needs in agriculture and food, energy and environmental protection,” said DuPont Asean Group Managing Director Hsing Ho.

When opening the office last month, Mitsubishi Electric said “foreign investment for the development of infrastructure and special economic zones is accelerating in Myanmar due to democratisation and economic reforms in recent years. The country’s consumer market has strong growth potential over the medium to long term.” 

Compared to China, which attracted nearly all global automakers in the first 10 years and a large number of companies in other industries, the speed seen in Myanmar is rather slow. Though impressed with the country’s political and economic reforms, some are cautious. The country is not fully free from violence as the nationwide ceasefire agreement is not yet signed. Meanwhile, the International Monetary Fund recently mentioned the country’s limited capacity to assist the economic reforms.

Representatives of the Union of Myanmar Federation of Chambers of Commerce and Industry were in Bangkok several times, to woo investment from Thailand. 

Glenn Robinson, the Chairman of the Australia-Myanmar Chamber of Commerce, is with the largest commercial delegation to yet visit Myanmar from Australia.

He told Australia Network News that even Australian mining companies, which are used to working in developing and difficult countries, are being cautious.

“They’re here learning what’s going on, talking to a whole series of people, working out who would be sensible to work with and who it would be sensible to avoid.”