Editor’s 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, I’d 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 country’s 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 I’ve seen to Yangon, compared to my last stint here five years ACUMEN 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 Editorial Board seems that every significant event in the city nowadays is a first. Jason Mraz’ concert at People’s Square and Park in mid-December marked the first major appearance by CEO / Chief Editor a Western recording artist in Myanmar, and Yangon’s first public New Year’s celebrations Dr. Htet Zan Linn attracted thousands of revellers. Director What’s most exciting about being in Yangon is the new sense of optimism Dr. Hein Thu Aung, Tin Tun Kyaw that people here seem to feel about the future. With the yoke of authoritarianism Executive Editor being lifted, Myanmar’s citizens are keen to forge links with the rest of the world. Phyo Wai Yangon’s chattering classes talk of investor protection, transparency and the rule of Editor English Edition law, bringing institutions up to international standards and launching joint ventures Alex Bookbinder with foreign companies. Small-and-medium enterprises, long denied opportunities to Editors grow under the weight of corruption and economic mismanagement, are waiting in Hein Zaw, Khin Win, Su Le` Nandar the wings to bring their products and services to the world. Reporters For all of its potential, foreign firms still perceive doing business in Myanmar Tha Toe Aung, Nang Aye Chan Moe to be risky. While this fear is not unjustified, there is a lot of misinformation circulating Designers about this country’s investment climate. Much of this can be chalked up to history; the Aung Aung (AN Computer), Thaw Tar Oo media in Myanmar is still developing an identity and voice after decades of censorship Computer Operator and repression, so accurate and engaging content about business issues is not as Zin Wai Wai Shein readily available as it perhaps should be. Marketing Department As Myanmar opens up, Myanmar B2B seeks to be a source of high-quality January Khine Mon, Naw Keziah, Yadanar information about this country’s business environment, and act as a link between Photographers local companies and their foreign counterparts. The press is a crucial tool for promoting Bait Thar, Aung Kyaw Moe (New Image), Thu Yein, Alex Bookbinder 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 Publisher and Copyright Dr. Htet Zan Linn future for this country and its citizens. Printer 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 ~ ~ [email protected] [email protected], [email protected], [email protected], [email protected], Voices “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 “We must behave duties, and may they be able to enjoy their rights.” maturely and act flexibly in order to take Daw Aung San Suu Kyi President advantage of the National League for Democracy current environment of 7 Days News Journal (VOL-11, No-43),January 3, 2013. (]]jynfolrsm; t&nftcsif;wdk;wuf&ef reform that is allowing a':atmifqef;pkMunfESpfopfqkrGefawmif;}}) our country to open up. There will be profound challenges in the future, and “Businessmen need to prioritise people must be realistic in their expec- long-term growth over short-term tations of politicians, not reactionary and profits. Thinking long-term is the extremist when politi- cal problems arise.” only way to bring about sustained

U Thein Sein President economic growth. If not, businesses Republic of the Union of Myanmar Biweekly Eleven Journal (VOL-5, will not be able to survive in the long No 40), January 4, 2013. (]]vlYtzGJUtpnf;twGuf ta&; run.” tBuD;qHk;onf vuf&dSazmfaqmif aeonfhjyKjyifajymif;vJrsm;rSwpfqifh Dr. Maung Maung Lay aocsmonfhtem*wfjzpfatmif Vice-President wnfaqmufa&;yifjzpfaMumif; UMFCCI or®wOD;odef;pdefajymMum;}}) Pyi Myanmar News Journal (No.852), January 3, 2013. (]]'DZifbmvukefrSpwifum w&m;r0ifukefoG,frIudk w&m;pGJqdkta&;,lrnf}})

“Everyone must be protected under the law in a transparent man- ner. Foreign investments that are beneficial for this country’s 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. (]]EdkifiHjcm;&if;ESD;jr§KyfESHonfhukrÜPDrSyk*¾dKvfrsm;tm; umuG,fapmifha&SmufouJhodkY jynfolrsm;tay: umuG,fapmifha&Smufr,fhOya'vnf;&dS&r,f}})

ACUMEN ⏐ 5

News in Brief

Printing industry Aung Gyi Group to import Chinese vehicles entrepreneurs sug- to Myanmar gest changes to taxa- With private citizens now able to im- from JAC that attended the ceremony, port vehicles privately from foreign was optimistic about the brand’s pros- tion regime countries, local companies have begun pects in Myanmar. “I came from China to ramp up the importation of foreign- to attend this ceremony. This occasion made cars to Myanmar. is very meaningful, as marks the launch While markedly less popular than of a formal relationship between Aung second-hand Japanese models, new Chi- Gyi and JAC. We are proud to be al- nese-made cars are gaining a foothold lowed to work in cooperation with Trad- in the Myanmar market due to their ers’ Company in the New Year.” competitive pricing, costing far less than JAC prides itself on its products’ new cars from other countries. JAC technological sophistication, and are par- (Jianghui Automobile Co., Ltd), China’s ticularly proud of the engine technol- A workshop on developing printing and tenth-largest automobile manufacturer, ogy at their disposal, acquired from their related industries in Myanmar, jointly has found a local distribution partner American joint-venture partner held by the Union of Myanmar Federa- in the Yangon-based Aung Gyi Group, Cummins, said Yang. Service centres for tion of Chambers of Commerce and In- which held an exhibition and sale of JAC products are set to open in Yangon, dustry (UMFCCI) and the Association JAC-brand trucks, tippers, buses and Mandalay, Naypyitaw and Mu-se. U of Myanmar Printing and Publishing En- passenger cars at Shwe Lin Ban Indus- Aung Thu, CEO of Aung Gyi Group, trepreneurs, was held at UMFCCI’s of- trial Zone in Yangon on New Year’s day. explained that servicing and accesso- fices on November 22, 2013. At the JAC products were sold at the exhibi- ries will be made available free of workshop, entrepreneurs in the print- tion at heavily discounted promotional charge under the terms of JAC’s one- ing industries presented papers on the prices in honour of the New Year. year manufacturer’s warranty. A development of the publishing sector in Mr. Yang Lixin, a representative 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 Myanmar’s 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

8 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Garment Makers go high tech Yatanarpon Teleport launches two new products

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 The first exhibition in Myanmar of high- to government sources. to the public," he said. tech garment manufacturing equipment Myanmar’s garment sector is likely Ytune gives customers the from abroad was held at the Tatmadaw to flourish with the suspension of West- option of using songs of their Hall in Yangon between 14-17 Decem- ern sanctions, new policies to facilitate choosing as ringtones on their ber, 2012. international trade, and the improvement cellphones, which can be pur- More than 100 entrepreneurs and of transport links with the outside world. chased through a new online companies from 17 countries participated There are more than two hundred gar- portal Yatanarpon has established in the exhibition, part of a new wave of ment factories now in Myanmar, and more for this purpose. Ytalk is a call- international interest in Myanmar follow- than thirty of those are foreign-owned. ing card that allows for Internet ing significant political and economic re- The garment manufacturing sector (VOIP) calling any where in the forms. Garment manufacturing in provides employment for more than world. Myanmar was largely unsuccessful in the 20,000 people, a small number by regional Unlike other VOIP solutions, past for a number of reasons, including standards. However, Myanmar’ slack of Ytune can also be used on economic sanctions imposed by western infrastructure, high real estate prices and landlines and cellphones without countries, a lack of skilled workers, and political instability has served to keep Internet access. Ytalk can also be an inability to produce high-quality prod- away many foreign investors for the time used on internet-enabled devices, ucts. being. such as laptops, smartphones and This is likely to change, according This exhibition was intended to es- tablets, and calling cards are to government sources, as companies from tablish links between local and foreign available in various denomina- Japan, South Korea, and Europe have all firms in the interests of promoting tions in both Kyats and FECs. A expressed interest in purchasing made Myanmar as an investment and sourcing in Myanmar garments. The United States destination. To that end, various trade or- was also a large purchaser of manufac- ganizations and chambers of commerce, tured goods from Myanmar before the both foreign and domestic, sponsored the imposition of sanctions, and may resume exhibition, including the Myanmar Trad- large scale importation in the future. ers’ Association, Yorkers Trade and Mar- Myanmar-manufactured garments have keting Service from Hong Kong, and the also been exported recently as far a field Association of Myanmar Garment Manu- as South America and Africa, according facturing entrepreneurs. A

ACUMEN ⏐ 9 News in Brief

Western Union marks re-entry to Myanmar

To mark its re-entry into the Myanmar market, Western Union held an event at the Parkroyal Hotel in Yangon on 12th 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 pany to have returned to Myanmar after certed efforts hand in hand with our sup- next year. most financial sanctions were scrapped porting agent banks in order to estab- Myanmar nationals working all over earlier in 2012. ‘‘We are glad to be able lish remittance services for Myanmar the world will be able to send money to facilitate easy, quick and smooth re- people living and working in various home within minutes. ‘‘The receiver on mittances services for people in parts of the world." this side must know the code number Myanmar," said Drina Yue, Western Standard Chartered Bank, a lead- with which money was sent from the Union’s Managing Director and Vice- ing British bank, and Thailand’s Kasikorn other side. The recipient’s citizenship President for Asia-Pacific operations. Bank have also opened branch offices card must be shown before the money ‘‘We intend to provide current ac- in Myanmar in conjunction with West- to be handed over," explained U Pe count services and offer loans. Extend- ern Union. Other foreign banks are look- Myint, the managing director of ing credit should serve to accelerate ing into establishing links with local part- Kanbawza Bank. Western Union is the Myanmar’s economic development," he ners in order to provide remittance ser- first American financial services com- continued. ‘‘We promise to make con- vices. A

10 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Seminar on Union members Myanmar-Vietnam under pressure from employers 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 Despite reforms granting em- ployers," he said. Members of Myanmar expert in intellectual property ployees the right to unionize the unions are routinely law, gave a presentation on the prospects signed into law in March 2012, singled for harassment and and pitfalls of investment in Myanmar as employer-employee relations abuse, with union leaders re- they relate to intellectual property pro- in Myanmar remain strained. ceiving especially harsh treat- tections. Dr. Daw Moe Moe Htwe, from More needs to be done to en- ment. ‘‘In such cases," Ko Ye the Ministry of Science and Technology, sure that unionized employees Naing Win explained, ‘‘we discussed the role of intellectual property do not live in fear of domi- make formal appeals on the protection in promoting development, and neering employers, says Ko Ye behalf of workers. We have U Thein Aung from the APAA discussed Naing Win, a spoke-sperson for also spoken with the govern- the potential for business-to-business links the Formation of Dispute ment departments that should between Myanmar and Vietnamese com- Settlement Arbitration Coun- be responsible for protecting panies. cil, a Yangon-based NGO that workers. But the government As the notion of intellectual property conducts dispute resolution for has thus far been unwilling to protection in Myanmar is quite new, Dr. labour issues. ‘‘After labour re- intervene." There is a popular Nguyen Van Vien, chairman of the Intel- forms were passed, the num- perception that, to solve prob- lectual Property Association of Ho Chi ber of unionized workers in lems between employers and Minh City, Vietnam (IPA HCMC) explained Myanmar swelled to some employees, employers need to how his country’s intellectual property 70,000 individuals. But due to recognize and respect the regime protection works, and the poten- employer intimidation, some rights of workers to organize, tial lessons for Myanmar to be learned 20,000 have already left the and that the government from Vietnam’s experiences. A unions. It is widely perceived needs to educate employers among workers that unions on the right of workers to form are inefficient, and are unable unions. At present, there are to protect [worker’s] rights. roughly 300 unions represent- Unionized employees gener- ing approximately 50,000 ally live in fear of their em- workers across Myanmar. A

ACUMEN ⏐ 11 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 Myanmar’s 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)

12 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 far the country’s most important water power generation. It is renewable, cre- way. From its origin at the confluence of ates no emissions, and can be imple- the N’Mai and Mali rivers in Kachin State, mented in ways that respect the environ- the Ayeyarwaddy flows south for some ment and the rights of people living in 2,000 kilometres to the Bay of Bengal, areas affected by dams. But the sheer passing through former seats of royal number of projects set to go online in com- power - Mandalay, Innwa, Sagaing, Bagan ing years, and a pervasive lack of due - along the way. More than a simple con- diligence throughout the construction and duit for information and trade, the development processes, bodes poorly for Ayeyarwaddy lies at the core of Bamar- the sustainability of Myanmar’s develop- culture and identity. ment agenda. The mismanagement of Today, the most sought-after re- hydropower projects in Myanmar poses source provided by Myanmar’s rivers is a number of serious risks, including the electricity, both for export to neighbouring relapse of armed conflict, which may countries and to improve Myanmar’s own serve to undermine investor confidence skeletal power grid. While it’s difficult to and the international goodwill accorded argue that Myanmar isn’t in massive need to President U Thein Sein’s government of basic infrastructure, the sheer scale of in recent months. these projects, their likely environmen- The furore surrounding the Myitsone tal, social, and cultural costs, and their dam, a massive Chinese-funded project questionable benefits for Myanmar itself on the Ayeyarwaddy just south of the have caused their appropriateness to confluence, exemplifies the pitfalls of hy- come into question. Myanmar’s govern- dropower development in Myanmar to- ment has pencilled in the construction of day. If and when it is completed, the dam at least 75 new power projects, 67 of will flood an area the size of Singapore, which are slated to be hydropower, ac- and displace an estimated 15,000 people. cording to a report by Eleven News in The geography of the confluence, the November 2012. But precious few of these Kachin people’s most sacred site, will be will meaningfully improve infrastructure permanently altered, and the dam’s en- in Myanmar, as much of this capacity will vironmental impact will be felt all the way be built primarily to provide power for downriver into Lower Myanmar. Given export to Myanmar’s neighbours China, the centrality of rivers - especially the India, and Thailand. Ayeyarwaddy - in Myanmar life, the Even in the case of dams that will Myitsone project is, unsurprisingly, highly produce electricity largely for domestic unpopular. consumption, power will be mostly gen- If the dam were to offer clear - cut Myanmar is a land of saints and spirits. erated in peripheral, underdeveloped benefits to the people affected by it or, for Out of the diverse array of figures wor- areas, and will be transported from there that matter, to people in other parts of shipped here, Shin Upagutta- the saint of to central Myanmar. Although rural resi- Myanmar, it might have managed to gain all waters - summarises the relationship dents of Myanmar’s restive minority ar- more public support. But under the terms between Myanmar’s people and its geog- eas will bear the brunt of the negative of a secretive deal signed in 2006 be- raphy perhaps better than all others. Be- effects of these hydropower develop- tween the former military junta and the lieved to prevent storms and natural di- ments, they unlikely to see many - if any dam’s Chinese backers, 90% of the power sasters, and to safeguard those travelling - of their benefits if reforms are not made. generated by the Myitsone dam would go by sea or river, the reverence accorded If the Myanmar government’s past poli- directly to China for a period of 50 years. to Shin Upagutta serves to underscore the cies are any indication, rural areas will The fact that Myanmar’s people would important position Myanmar’s rivers play most likely not be granted easy access to scarcely benefit from such an invasive in the country’s collective consciousness, the electricity generated in their own project was seen by the public as insult and their significance as a resource. backyards. piled on top of injury, prompting President Myanmar’s other rivers pale in stat- Hydropower - in and of itself - is less U Thein Sein, in September 2011, to an ure next to the mighty Ayeyarwaddy, by problematic than many other types of

ACUMEN ⏐ 13 Feature

nounce that construction would be sus- willingness go against the wishes of pended until 2015. Myanmar’s largest trading partner, many The President’s announcement was claimed, was evidence that the new ci- hailed as a victory by prominent mem- vilian-led government had become, for bers of civil society and opposition poli- the first time, responsive to the desires of ticians, including Daw Aung San Suu Kyi. the country’s people, and saw taking stock But although the suspension was widely of public opinion in their policymaking lauded at the time, the project’s detrac- as necessary to maintain their own legiti- tors may have rejoiced too soon. Whether macy. or not the dam’s principal backer, the Public opinion certainly factored into state-owned China Power Investment the President’s decision to suspend the Corp (CPI), ever actually stopped work dam - evidence that construction has re- at the dam site is not clear. According to a sumed not with standing. But the people’s recent report by activist group Burma Riv- desire alone was not enough to make him ers Network, a group of Chinese work- change his tune. With sanctions having ers remain at the construction site, and an- essentially closed Myanmar off to West- ecdotal reports from the region suggest ern investment, the former military gov- that limited construction is still going on. ernment had been forced into an uneasy In a leaked note from March 2012 marriage of convenience with Myanmar’s reported on in the national media, local much larger neighbour to the North. In authorities requested supplies from 2012, China surpassed Thailand to be- Naypyidaw in anticipation of an influx of come Myanmar’s largest foreign investor, new workers and equipment from China which, at 14 billion dollars’ worth of FDI arriving onsite to restart work, via a sup- in 2011, amounted to 35% of all foreign ply road - still under construction - lead- investment that year. While China’s eco- ing from the Chinese border to the dam nomic footprint during the sanctions era site. In June 2012, the International Com- was comparable to that of other states, the mission on Large Dams (ICOLD) issued spectre of Chinese investment has come a statement confirming that the planners to be considered particularly pernicious of the Myitsone dam formally requested by some elements within President U an assessment on the project from inter- Thein Sein’s government. The nature of national dam experts. Both pieces of evi- the investments China intends to make in dence suggest that CPI intends to resume Myanmar, and its strategic aims in the full-scale construction well before the region, have prompted many in Myan- Given the historical 2015 moratorium expires. mar to treat Beijing’s aims with suspicion. China has long been an important in- The ostensible suspension of the dam indifference shown to vestor in Myanmar. When Western com- project was intended to realise two stra- public opinion by previous panies were forced to leave due to the tegic goals at once: to placate an increas- imposition of sanctions in the 1990s, Chi- ingly outraged population, as well as military regimes, nese companies swept in quickly to fill the improve relations with the West. By up- void. Most major Chinese-backed, capi- holding a democratic value Western gov- President U Thein Sein’s tal-intensive projects in Myanmar today, ernments hold to be important - respon- spurning of China, either in progress or planned,were ap- siveness to popular opinion - the Presi- proved by the previous government be- dent has sought to bring about a greater with the announcement fore the November 2010 elections were level of engagement and interaction with that dam project would be held. Given the historical indifference the West, in the eventual hopes of woo- shown to public opinion by previous mili- ing new Western investment and reduc- suspended, took tary regimes, President U Thein Sein’s ing Chinese economic dominance. spurning of China, with the announcement Companies from high-wage coun- international observers that dam project would be suspended, took tries, both in the West and in Asia, have by surprise. international observers by surprise. His expressed interest in investing Myan-

14 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 mar’s manufacturing sector, as the coun- What Myanmar does offer China, six dams upstream of the Myitsone try has the potential to develop into a however, is abundant natural resources project, and has already completed one competitive, low-wage manufacturer. right on its doorstep, especially conve- dam to generate power for the construc- Chinese companies, by contrast, are fo- nient for its development plans in Yunnan, tion of the Myitsone dam itself. Chinese cused almost exclusively on exploiting with which Myanmar shares a 2000- companies are also helping develop dams Myanmar’s natural resources. While 30- kilometre border. Myanmar’s largely underwritten by Thai interests elsewhere odd years of economic openness have undammed rivers are seen by Beijing as in Myanmar, primarily along the also as- brought hundreds of millions out of pov- important for the development of West- yet- undammed Thanlwin (Salween) river. erty in China, the People’s Republic re- ern China, and state-linked Chinese firms Much like China, Thailand is keen mains highly economically stratified, with have moved to develop similar hydropower to exploit the power resources of its less- a wide gap between the manufacturing projects in neighbouring Laos as well. developed neighbours in order to provide powerhouses of the East Coast and the The scale of China’s planned in- cheap power for its own manufacturing relatively underdeveloped provinces to volvement in Myanmar’s hydropower sector, centred along the Eastern Sea- the West. Beijing, keen to further devel- sector extends well beyond the Myitsone board near Bangkok. A Thai company, opment at home, has no desire to see project itself. On the N’Mai and Mali riv- MDX Group, along with a consortium of Chinese manufacturing jobs go to Myanmar. ers alone, China plans to build a total of four Chinese contractors and investors,

ACUMEN ⏐ 15 Feature

began construction of the TaSang dam, hydroelectric bounty with communities current administration enjoys little popu- designed by a British firm, in central Shan that will be directly affected by the dams lar support there. Over the years, perva- State in mid-2007, although not much being built; hydropower developments in sive human rights violations perpetrated construction activity has taken place at the Myanmar’s underdeveloped periphery by government forces, and a fundamen- dam site since 2008. If and when it is fin- have a long history of not serving the tal absence of the rule of law, have driven ished, the TaSang dam will be the tallest needs of the people most affected by them. local people to support ethnic opposition in Southeast Asia, producing over Dating back to the 1960s, the Lawpita dam groups, most notably the Karenni National 7,000mW of electricity per day. Around in Kayah State is Myanmar’s oldest, and Progressive Party and its armed wing, the 85% of its output is slated to go to Thai- serves as a useful case study for the prob- Karenni Army. Instead of treating the land. lems that irresponsible dam construction ethnic peoples of Myanmar’s frontiers as Plans for at least five dams along the can cause. equal partners in development, previous Thanlwin were drafted under the former As with the latest round of proposed military regimes’ focus on national unity military regime, and, if built, the vast dams, the power from Lawpita is trans- at all costs allowed them to justify extract- majority of the electricity generated by mitted far away, directly to Yangon and ing the resources they wanted through them will go to China and Thailand. As Mandalay, leaving Kayah State with se- summary subjugation, with no concern for with the planned dams in Kachin State, vere power shortages. Over four decades the human cost involved. In Kayah State, the proposed Thanlwin dams in Shan and of expansions, more than 12,000 people the military has been accused of confis- Kayah states lie in the middle of areas have been displaced without proper com- cating land by force without compensat- long afflicted by civil war. While tradi- pensation, according to a 2006 report by ing its inhabitants, laying landmines, and tional wisdom has often equated devel- activist group Salween Watch. The flood- drafting local people to provide forced opment in war zones with promoting ing of the reservoir swallowed thousands labour. peace, dam building for distant clients at of square acres of arable land and exac- President U Thein Sein’s govern- the expense of local populations - as has erbated water shortages, causing fish ment has expressed an interest in end- happened in the past in Myanmar - might stocks to dwindle. To date, 80% of Kayah ing Myanmar’s myriad ethnic insurgen- only serve to catalyse civil war to a greater State’s population has no access to cies, a legacy that would be commendable degree. Myanmar’s national electricity grid. to leave if it is done by engaging ethnic Despite a serious lack of infrastruc- The previous military government’s armed groups in good-faith dialogue. The ture in rural areas, the government has lack of regard for dam-affected commu- government has recently signed cease- not announced plans to share the planned nities in Kayah State has ensured that the fires with a number of ethnic armed

16 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 groups - most notably, the Karen National The military has had a longstanding Union in January 2012 - but ending open fear of federalism, based on a belief that hostilities without addressing the under- devolving political power to ethnic minor- lying dynamics of conflict will not be ity regions will lead to the dissolution of enough to bring about lasting peace. the Union. To ensure long-term stability The flooding Naypyidaw will need to negotiate settle- and economic growth, however, ethnic of the reservoir ments with ethnic parties to normalise minorities will need to be meaningfully their political status in government, and incorporated into the development pro- swallowed thousands of allow them to establish a role in state- cess. This will only occur if ethnic minori- level and/or national politics. Without ties are treated as equal stakeholders in square acres of binding commitments from the govern- the central government’s development arable land and ment, however, getting non-state armed agenda. groups to disarm will be difficult. Accountability, transparency and exacerbated water Although poor relations between thorough impact assessments need to be shortages, causing fish Myanmar’s central government and eth- of principal concern when it comes to nic minorities have defined ethnic poli- hydropower development in Myanmar. stocks to dwindle. tics in the country for decades, irrespon- Contracts for the export of hydroelectric- sible development practices have exac- ity signed under the former military re- To date, 80% of Kayah erbated tensions that might have other- gime, subject as they are to no account- State’s population wise been lessened through dialogue and ability or oversight, will need to be re- collaboration. Despite the fact that most examined, despite the inevitable politi- has no access to of the non-state armed groups operating cal fallout with Myanmar’s neighbours Myanmar’s national in Myanmar today started out as armed that is likely to ensue. Ensuring that independence movements, the vast ma- planned projects in remote and underde- electricity grid. jority have now expressed a desire to veloped areas move forward in ways that remain part of an inclusive and demo- will benefit local populations is crucial for cratic Union of Myanmar, so long as a political stability, and are prerequisite for modicum of political power is devolved lasting economic growth to occur. to the state level.

ACUMEN ⏐ 17 Feature

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 diminished considerably, and recently by these projects, and the inadequacy of As Myanmar opens passed foreign direct investment laws property and compensation laws currently should serve to protect investors’ interests, in place - let alone mechanisms to enforce to the world, the current a lack of basic infrastructure makes them - leaves companies with little incen- administration must Myanmar a less attractive investment des- tive to ensure that those displaced by tination than it might otherwise be. these projects will be properly compen- demonstrate the strong For all its natural endowments, sated for their losses. leadership required to undo Myanmar should not be an energy-starved The pending hydropower export country. Although the reliability of deals signed with Chinese, Thai and In- the damage of the previous Myanmar’s electrical grid has improved dian firms are a hangover from the former steadily over the past few years, black- military regime’s policy of selling off government’s mismanage- outs are still unacceptably common, even Myanmar’s natural resources at fire sale ment, even if that means in major urban areas. Manufacturing prices at the expense of developing the wages in Myanmar are the lowest in economy at home. Internationally isolated straining relations Southeast Asia, but low wages alone will and starved for foreign currency, the with Myanmar’s neighbours not be enough to attract foreign invest- former government likely felt that giving ment; the savings to potential investors foreign interests rights over Myanmar’s in the short-term. in the manufacturing sector are offset by rivers was a pragmatic way to get cash the cost of dealing with the country’s poor fast. But in the wake of recent economic infrastructure. Additional capital costs reforms, and new interest in Myanmar Despite a general feeling of optimism need to be incurred - buying diesel from western investors, exporting the about Myanmar’s future prospects among generators and fuel, for example - in or- resources necessary to develop Myan- those familiar with the country’s economy, der to guarantee factories a steady supply mar’s inadequate infrastructure will only the expected rush of would-be foreign of electricity. damage the country’s growth prospects investors has amounted to little more than If Myanmar’s current government re- in the long run. a trickle thus far. While the red tape as- mains willing to send the lion’s share of sociated with going into business has the country’s potential hydroelectric pro-

18 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 duction abroad, foreign investors will have serious negative effects on the en- attract more foreign investment and pro- likely continue to ply money into other vironment. While some hydroelectric vide greater opportunities for domestic countries in the region with better infra- projects will be necessary to modernize businesses to grow and prosper. An inclu- structure - such as Indonesia or Cambo- Myanmar’s infrastructure, the sheer num- sive, sustainable and comprehensive de- dia - even if labour costs in those coun- ber of projects currently on the books velopment agenda - in tandem with po- tries are higher. Attracting foreign invest- would result in an ecological and eco- litical reforms that give ethnic minority ment, however, is not the only reason to nomic catastrophe - profoundly affecting areas more control over their own affairs use Myanmar’s resources for domestic de- forestry, agriculture and fisheries - if all - will be especially beneficial for the his- velopment first. Responsible hydropower of them were to be built. torically neglected and marginalized ar- development that respects the rights of President U Thein Sein has shown eas where most hydropower develop- individuals and communities in dam-af- a willingness to break with many of the ment would occur. fected areas, combined with good-faith excesses, inefficiencies and absurdities of As Myanmar opens to the world, the negotiations with non-state armed groups, Myanmar’s former governments. current administration must demonstrate may help prevent new bouts of civil war Myanmar’s rivers are an important re- the strong leadership required to undo the from breaking out. source that can help facilitate his damage of the previous government’s Decades of neglect and oppression government’s reformist agenda, but the mismanagement, even if that means throughout Myanmar’s frontier areas hydropower sector must be developed straining relations with Myanmar’s have left the present administration with cautiously if these reformsare to be du- neighbours in the short-term. Respon- a serious legitimacy problem. Harnessing rable and sustainable. Rather than per- sible hydropower development, in tan- Myanmar’s natural resources to improve petuate the patron-client relationships dem with political reforms and initiatives standards of living for rural people and that have come to define Myanmar’s re- to make ethnic minorities equal stake- ethnic minorities should be a priority, and lations with its neighbours, sustainable holders in the development agenda, must would serve to legitimate the govern- hydropower development can allow replace the rampant, unchecked dam de- ment’s development agenda in areas Naypyidaw to develop the country’s velopment that looks set to export one of where the benefits of Myanmar’s new- economy with more diversified sources Myanmar’s most crucial resources to found economic openness have not been of investment and serve to increase liv- neighbouring countries against the felt. Dams are invariably invasive, and can ing standards, as better infrastructure will country’s best interests. A

ACUMEN ⏐ 19 Feature

to undertake job creation initiatives focused fied workers with the ability to thrive in on providing work opportunities for young the competitive pressure of a globalized people. economy. Given Myanmar’s attractiveness Increasing personal income and cre- as a low-wage producer, the manufactur- ating jobs, especially for young people, is ing sector is set to expand considerably. If critical for alleviating poverty and raising the manufacturing sector is promoted prop- standards of living, claims Myanmar Brew- erly, new jobs will be created for millions ery Ltd.’s commercial director, U Myint Zaw. of workers, which should serve to sub- ‘‘If four members of a five-member house- stantially reduce unemployment. hold were to work, rather than two, the But how should potential employers additional productive members of the best contact qualified potential employees? workforce would add substantially to that U Aung San, a consultant with the Naing household’s total income. Indirectly, fami- group, a construction company in Yangon, lies with greater income are able to con- thinks that employers need to make a con- ecades of mismanagement and sume more food, clothing, etc. With greater certed effort to find workers. ‘‘Events ca- economic stagnation have resulted buying power comes greater spending, tering to job seeking are in order. If the D in a serious unemployment prob- which - if incomes rise significantly - should state were to hold job fairs in conjunction lem in Myanmar. Accurate figures are hard allow Myanmar’s economic pie to grow with big companies, new job creation- and to come by as the last nationwide census across the board," he said. the consequential alleviation of poverty that was conduced in 1983, but a survey on Despite the fact that foreign compa- would result - would receive a big boost," employment and poverty, released by Par- nies have begun to invest in Myanmar, it he explained. liament in January 2013, found that some is important that local firms continue to Myanmar’s unemployed include many 40% of the country's labour force is unem- expand, despite the challenges - real or fresh graduates. Despite their high levels ployed and that roughly 60% of the popu- imagined - they might face. To compete of education, they remain jobless as em- lation lives under the poverty line. To tackle with foreign firms, local companies need ployers are unwilling to hire them due a joblessness and poverty, concerned orga- to overhaul their organizational structures, perceived lack of work experience. Daw nizations and entrepreneurs have begun work to optimize their costs and find quali- Khin Lapyayt Wun, a manager at PKK

20 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Employment Agency, elaborates. ‘‘The main constitutes great hindrance at job inter- Myanmar has plenty of educated weakness of today’s job seekers is that they views. Thus, young people drift into pro- people, but low salaries have prompted want to work as soon as they have fin- longed unemployment. It would be ben- many of the country’s best and brightest to ished their schooling or university educa- eficial for youths if companies were to of- seek out opportunities abroad. While it is tion. Those with work experience are eas- fer training programs, with the eventual unrealistic to expect either domestic or for- ily employed. While opportunities abound goal of regular employment. Otherwise, eign companies to offer salaries commen- for qualified persons, the situation is more young people will be trapped in an end- surate to those on offer in more developed difficult for fresh graduates." less cycle - joblessness leading to jobless- economies, skilled workers might be Nevertheless, companies should start ness for lack of experience. It’s a classic tempted to stay in the country if better re- employing eager and motivated youths, catch-22," he said. muneration was offered. To prevent the taking into consideration their level of aca- Recent grads may also forego employ- outflow of the skilled labour force crucial demic achievement alone, she explained. ment they consider to be less than ideal, for Myanmar’s development, firms have If employers fail to overlook recent gradu- as they would prefer to find work related an obligation to provide salary levels high ates’ level of motivation, despite their lack to their field of study. Ma Yamin Shwe Sin, enough to stop this ‘brain drain’ of skilled of formal experience, and continue to an educational consultant based in workers from the country. prioritise those with more experience, ca- Kamaryut Township, Yangon, remarked: Ultimately, the conundrum of unem- pable young people may be left in a lurch. ‘‘Most people would prefer a job related to ployment in Myanmar will only be solved Although people are struggling worldwide their studies, and turning down unrelated if all stakeholders act in a transparent in these times of economic uncertainty, they jobs might be a reason for the voluntary manner - job seekers, the government and have a lot to offer if given opportunities to unemployment of so many. But this doesn’t would-be employers alike. If the work. need to be the case. As more job opportu- government’s policy is effective and indus- U Linn Htun of Yangon-based Devel- nities become available, unemployment will try is receptive to the demands of the opment Consultancy Co., Ltd. recognises the go down. At present, applicants for scarce workforce and international markets, need to incorporate recent grads into the positions greatly exceed the number of jobs Myanmar will be able to decrease its un- workforce as soon as possible. ‘‘Most com- on offer, so creating more job opportuni- employment rate while increasing its citi- panies usually look at the years of work ties overall is crucial," she said. zens’ purchasing power and living stan- experience in would-be employees, which dards. A

ACUMEN ⏐ 21 Cover Story

22 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Prof. Dr. Aung Tun Thet : As Myanmar’s 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 20th century, there were three countries where Coca-Cola didn’t do business – North Korea, Cuba and Myanmar. So we’d 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 Khrushchev’s reforms got underway. You think there’s a precedent there for Myanmar? That might be the case. There’s no way Coca-Cola would have reinvested in Myanmar without the lifting of sanctions and the express blessing of the US government. So it’s a good thing that Coca-Cola has announced that it’s coming back. If the United States didn’t want investment in Myanmar, Coca-Cola wouldn’t be coming. I think both the US government and Coca- Cola feel that they’ve seen good progress in Myanmar, so they’ve 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 oca-Cola and Pepsi – the towering giants of is where their entire operation is one-hundred-percent owned the global soft drink industry – haven’t had and operated by them directly – straight foreign direct invest- C an official presence in Myanmar for de- ment, if you will. But under the current legal regime, they will cades. While their products have been available only be able to do this gradually. At this point, they’re only able for years as unofficial imports, the easing of Ameri- to hold a 49% ownership stake at most – the majority partner can sanctions has brought with it a full-on cola war in joint ventures must be a local company. But over time, this is to Myanmar, as Coke and Pepsi jostle for space in likely to change: the government has expressed an interest in an increasingly crowded domestic beverage mar- allowing foreign companies to own a greater share of joint ket. Aside from each other, the beverage titans will ventures than they are permitted to own now. Over time, Coke have a host of domestic producers to compete with may try to become the exclusive owner of their distribution for market share. and/or bottling operations in Myanmar. Dr. Sai Sam Htun’s Loi Heng group is a major player in Myanmar’s beverage industry. Our Prof. Do you think they would establish their own 100-percent Dr. Aung Tun Thet sat down with him to discuss foreign-owned manufacturing and distribution facilities if Coca-Cola’s official reappearance in the country, and the government were to allow them to? what it means for the future of Myanmar’s bever- They’re playing it cool for now, and haven’t made any age industry. mention of their plans publically. At this point, they’re willing to ACUMEN ⏐ 23 Cover Story

collaborate with local – marketing. Coke is the kind of product that the company businesspeople and share When Coca-Cola wants to position as something you pick up automatically when the wealth. You’re right that you enter the store. they aren’t the majority enters the Myanmar shareholder yet, but with a market, you’ll see What do you think of their advertising? legal framework in place When Coca-Cola enters the Myanmar market, you’ll see that allows it I expect they red signs every- red signs everywhere! On football fields, on TV, etc. Domestic would establish their own, where! On football producers simply won’t be able to compete. For now, foreign bespoke bottling plants brands like Coke and Pepsi will take charge of branding and distribution networks with- fields, on TV, etc. marketing while local companies will be responsible for distri- out local partners involved. Domestic producers bution and sales – a relationship that may change if these com- panies choose to establish their own bottling plants and distri- They’re already here, so simply won’t be able they’ll probably be interested bution networks in the future. in making a long-term in- to compete. So their responsibility is marketing and advertising, and vestment. they will outsource everything else to us (Myanmar na- tionals)? Establishing their own Our responsibility is to manufacture the product, and to facilities without local partners would be the first model, distribute it. For now, at least, we’re going to have to operate then. I can assume that the second model you’re going to like franchisees, if you will. mention involves retaining a local partner? Exactly, yes. The second model Coca-Cola could follow would If and when they establish their own manufacturing facili- be to retain a partnership with a local counterpart, even if ties, what do you think their production capacity is going they’re allowed by the government to set up a one-hundred- to be like? 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, they’ll take it slow, make cautious moves. They’re well positioned because what they do is relatively niche, at least compared to an operation like my own: they’re in the cold drink business, but aren’t 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 – Prof. Dr. Aung Tun Thet 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 don’t. The business model is pretty straightforward. Their main job is managing retail distribution and – especially

24 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 That is going to be an important factor. The sheer amount should be stiff, and if domestic producers are unable to inno- of capital at their disposal means they’d be able to establish vate, they’ll get lost in the shuffle. something quickly that would outstrip the capacity of our facili- ties. Coca-Cola has an extremely strong brand, which should So domestic producers don’t have a choice? To stay alive, work in their favour over domestic brands. In developing coun- will domestic companies need to cooperate with the large tries, people tend to prefer foreign brands. I’d imagine that in international brands? this country people will prefer to drink Coca-Cola over our If they choose to cooperate with us, we’d be happy to brands - not that that’s a reflection on the quality of their prod- cooperate with them. As I mentioned, domestic firms will be uct relative to ours, just that their brand is such a force to be producing their products for them, at least at first. If we (Loi reckoned with. Hein Group) cooperate with foreign beverage companies, other companies will, too. I think it’s pretty well understood in the So do you think you can keep your brands viable by com- industry in Myanmar that trying to compete directly with the peting on price? foreign giants is futile. The only way we’re going to be able to They won’t make it easy for us! Coca-Cola is such a large survive is to collaborate. 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- Do you think you’re going to be able to retain your inde- ket share. pendence? I should clarify: I’m referring to the soft drink market only. Now that Coca-Cola has signaled its intention to invest, do There, it will be difficult for us to compete, but we (Loi Hein) you think other foreign firms are going to follow suit? should still be very competitive to when it comes to purified Well, Pepsi is on its way. F&N (Fraser and Neave, from water. And our energy drink brand – Shark – is strong enough Singapore) is also likely to get in on the action. The competition 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 isn’t 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, we’re incumbents that will be much harder to dethrone. Ultimately, soft drinks are trendy. People in America accept that drinking Coke isn’t good for your health. But most people drink Coke every day because it’s fashionable to do so. So domestic producers don’t need to be afraid. Be- tween our purified water business, the energy drinks and the joint ventures, we’ll be alright. But we’re 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 don’t 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 Dr. Sai Sam Htun sales of soft drinks with sugar to children in New York City? That goes back to what I was saying before. Coca-Cola’s brand is extremely strong. It’s common knowledge that drink-

ACUMEN ⏐ 25 Cover Story 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 I’d imagine you’re 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 Myanmar’s beverage in- dustry? The beverage industry really doesn’t need experts because it’s 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. don’t need to worry about finding market experts? Not at all. And they won’t be able to steal away our ex- perts either. They’ll train their own. Local companies won’t provide the management expertise they’re going to need – that’ll 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 you’d find it useful to replicate? Sure, we can imitate them. It’s 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, we’ll 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 Asia’s economies. So, technically, if we in Myanmar are able to produce bever- ages at a sufficiently low cost, we’d 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-Cola’s arrival as a tangible symbol of just how far this country has come and how things are changing substantially for the better. This coun-

26 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 try still faces serious problems, but Coca-Cola’s 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, it’s 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 can’t talk billions. Economies here are just too small. But in Thailand, Coca-Cola’s investment was worth US$450 million, so that number may be an indication of the numbers we’ll 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, we’ve 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. He’s been working with us since September 2011. That, in my mind, is preparation. If we can’t find a professional in the field domestically, we’ll 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. It’s 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, that’s where we as employers step in. It’s imperative that our people are trained properly. It’s 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. It’s 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

ACUMEN ⏐ 27 B2B Talk

28 ⏐ ACUMEN ACUMEN www.myanmarb2bmagazine.com www.myanmarb2bmagazine.com April 2013 On October 12th, 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 Myanmar’s

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.

ACUMEN ⏐ 29 B2B Talk

Dr. Aung Tun Thet : Mingalaba to all present. Today, we’re going to discuss the state of Myanmar’s airline industry, and the changes the sector is likely to experience as the travel and tourism sector expands. Myanmar’s poor road infrastructure makes developing the airline industry important for the country’s economic, political and social well-being. I’d 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 we’ve 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 27th, 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 Dr. Aung Tun Thet : Let’s hear what U Phone Paing Oo has to your company. Now, U Htoo Thet Htwe, please give us some say about his tourism business. information about Air Bagan. U Phone Paing Oo : Ayarwaddy Legend Travels & Tours was U Htoo Thet Htwe : Air Bagan started flying in November established in July 2007. So we’re in our sixth year of exist- 2004, and was the first wholly private airline in Myanmar; in ence, and have established a branch office in Mandalay. We the past, all airlines were required to enter into joint ventures are involved in both domestic and international tourism, and with the state carrier, Myanma Airways. At present, we oper- offer services to a wide variety of domestic and international ate flights to 19 destinations, including Chiang Mai two times clients. We also arrange conferences and exhibitions, and deal per week. In conjunction with MAHA tours, we operate char- with the logistics associated with these events for our clients. ter flights to Bodhgaya once per week. Dr. Aung Tun Thet : What are your plans for 2015, when Dr. Aung Tun Thet : U Moe San Aung, please give us some AFTA (the ASEAN Free Trade Area) and AEC (ASEAN Eco- information about Air KBZ. nomic Community)go into effect?

U Moe San Aung : Air KBZ has operated with a fleet of two U Kyi Win : As ASEAN is set to introduce an open-skies ATR-72 500s since April 2011, and we expect to add two more policy between member states, Myanmar will be obliged to ATRs to our fleet soon. We fly to 13 destinations, and expect to allow international airlines unrestricted access to our airports. add Putao and Bhamo to the list in the near future. Seven international airlines are currently allowed to fly here, Dr. Aung Tun Thet : How are relations between your airline but domestic airlines are not in a position to compete with and MAI (Myanmar Airways International)? them. I have learned that two new domestic airlines will be granted operating licenses in the near future, two of which U Moe San Aung : MAI is 20 percent owned by KBZ and 80 intend to launch international services. If Myanmar’s aviation percent by the government. We are responsible for taking some industry can get its act together and pool resources– instead of international passengers to domestic destinations connecting maintaining the status quo of smaller airlines competing with to MAI’s international flights. We do have a permit to fly inter- each other – Myanmar-based airlines will be much better nationally, but only operate on domestic routes at this time. equipped to compete with international airlines. The govern-

30 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 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 airline’s 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. It’s also diffi- cult for us to acquire spare parts for our aircraft. In most countries, such parts are ment should protect domestic airlines, because we haven’t been not subject to import duties, but in Myanmar, we pay import profitable. For as long as we’ve been around, Asia Wings has duties that increase based on the value of the pieces we wish operated at a loss. In spite of our unprofitability, we still oper- to import. To bring Myanmar in line with international avia- ate because the authorities have requested our help to meet tion norms, aircraft parts must be exempted from import du- Myanmar’s air transport needs. I’m not saying that there’s any- ties. thing wrong with international airlines flying to Mandalay or Yangon, for example, but domestic airlines need to be allowed Dr. Aung Tun Thet : In terms of foreign competition, I agree to maintain a monopoly over domestic flights. If this sort of with U Kyi Win in general, but I think that protectionism might protection is maintained, I believe that Myanmar’s airlines be perceived as corrupt in light of ASEAN’s moves toward should see sustained growth and be able to compete with for- regional economic integration. If possible, Myanmar’s aviation eign carriers in the long run. industry should try to promote itself rather than insulate itself from foreign competition. Does Air Bagan have any plans to Dr. Aung Tun Thet : I’d like to know what preparations, if expand, U Htoo Thet Htwe? any, Ayarwaddy Legend is making to provide services for the Western tourists expected to arrive in Myanmar in unprec- U Htoo Thet Htwe : Yes, we are currently in the process of edented numbers in the near future. 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 U Phone Paing Oo : As far as promoting our tourism business a loss just to promote tourism development, and it’s true that is concerned, we need to obtain internationally recognized the government should protect domestic airlines from foreign qualifications – ISO certification, for example. Without such competition. When we enter the open-skies agreement in 2015, standards in place, it’s difficult to compete with foreign compa- we will likely face tremendous difficulties competing with gi- nies. We’re working on capacity-building in-house to raise our ant foreign airlines. standards. Dr. Aung Tun Thet : Does Asian Wings have any expansion Dr. Aung Tun Thet : U Kyi Win, what challenges does your plans, U Kyi Win? business face as the aviation industry in Myanmar changes?

ACUMEN ⏐ 31 B2B Talk

U Kyi Win : When the open-skies agreement is put in place, despite the discomforts of train travel, it took air travel a long we will be allowed to penetrate foreign markets, just as for- time to catch on. Over the past few years, flying has become eign airlines will be allowed to do here. JetStar already has a much more common in China, as ticket prices have gone down codesharing agreement with MAI for international flights, and and the media has promoted flying as being safe, affordable Air Bagan has experience flying to other regional markets. and convenient. We’re not as experienced in this regard, but have an operating There is still a perception among the Chinese public license that allows us to expand internationally if we want to. that flying is unsafe, but that’s a myth that can be debunked by We’ll start by servicing regional markets first, and if that goes looking at the statistics. According to research conducted by well, we’ll broaden our horizons to destinations further afield. the ICAO (International Civil Aviation Organization), for every thousand car trips, one person is killed in the United Kingdom. U Moe San Aung : Although KBZ has focused on the domes- It’s even worse in America, where four people are killed for tic market for now, we’re keen to go further. When we receive every thousand car trips that are made. But the global fatality our new ATR-72 600, which we anticipate will occur in De- rate for airline travel is one person killed for every million cember, we will be the first airline in the region to operate this passengers carried. It should be abundantly clear that air travel aircraft variant. The 600 variant of the ATR 72 is a substantial is far safer than travelling by car or bus. I must say, though, I improvement over the 500, boasting a glass cockpit and touch- personally prefer to drive instead of flying; because I used to screen instrumentation. As our domestic destinations tend to be a pilot, and I don’t really enjoy being on flights that I’m not be fairly close to one another, we are unlikely to purchase in command of. Sure, call me conservative; I’m happy to take aircraft better suited to servicing long-haul routes. ATR prod- the bus, which is usually how I travel unless it’s unfeasible to ucts suit our needs perfectly, because of their fuel efficiency on do so. short-haul routes. Consumers in Myanmar will need to change their Dr. Aung Tun Thet : What is demand for air travel like among attitudes towards flying. When some of those statistics I men- locals? One might imagine that consumers would prefer to fly tioned were published in a story that ran in a Wuhan, China- rather than travel by bus or train. Yet air travel remains out of based local paper, the local airline reported a spike in demand the financial reach of the majority of people in this country, – perhaps not surprising, given that people were made aware and so the cost of flying must go down for the sector to grow. that driving is 250 times more dangerous than flying! Every- Do you intend to introduce flights at more reasonable price day, new airlines are emerging throughout the Asia-Pacific points? region. As of 2012, there are six airlines based in Myanmar, which carried a total of 120,000 passengers this past summer. U Kyi Win : You raise a really important point. Let’s use the I think that’s far too few. In China, people have come to aspire Chinese mindset as an example. Even as recently as four years to fly at least once in their lives. We need to introduce similar ago, trains were the dominant mode of long-haul travel in notions in Myanmar to make the airline industry here sustain- China. People were afraid of flying, and cars were unaffordable. able. Old Chinese trains covered long distances, but could take days to reach some destinations. Trains were crowded to the point Dr. Aung Tun Thet : What growth opportunities do you see in where even going to the toilet became an arduous task. But the travel and tourism sector, U Phone Paing Oo?

32 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 U Phone Paing Oo : We’ve seen a massive increase in tourist companies that want to export high-end vehicles to Myanmar, arrivals in the past year, but Myanmar still has a long way to for example, might choose to fly them over. Given how under- go when compared to its regional neighbours. Thailand re- developed the market for air cargo is, that might be another ceives about 17 million tourists per year, and Vietnam receives line of business for us to consider, but we should wait and see about 7 million. Barely one million tourists arrived in Myanmar if there will be any favorable changes to customs rules and over the past 12 months. I’m confident more tourists will arrive commercial taxation. after 2015, when the ASEAN Tourism Strategic Plan goes into Dr. Aung Tun Thet : If you have anything else to discuss, effect. The openness it is set to promote should see some 25 please do so. million tourists travelling around the region annually. The tour- ism sector in Myanmar is only going to grow, and, by working U Htoo Thet Htwe : In Myanmar, qualified workers in the together, the tourism, hotel, and airline industries should all airline business are hard to come by. Granting operating li- prosper. cences to new operators will only exacerbate this problem; the government should put a reasonable limit on the number Dr. Aung Tun Thet : ‘Business to business’- type partnerships of new airlines that are allowed to operate. between firms operating in different sectors, both foreign and domestic, have come into vogue lately. Have you established U Kyi Win : Another recent ICAO study claims that there will formal partnerships with businesses outside of the airline in- be a global crew and cockpit staff shortage in coming years. dustry - for example, with catering providers? We, as the leaders of Myanmar’s aviation industry, should at- tempt to fill this need, and should be in the business of training U Htoo Thet Htwe : As an airline, we have strong links with skilled employees and technicians. Myanmar would benefit lots of travel companies. Much of our business comes from greatly from the establishment of a civil aviation academy, ticketing agents, as well as companies that offer package tours. whose goal should be to produce aviation workers with the I suppose you could also put our interline agreements with kinds of skills and expertise needed to work internationally. international airlines under the umbrella of ‘B2B relations.’ Dr. Aung Tun Thet : In conclusion, I would like to express my U Phone Paing Oo : We partner directly with a number of thanks to all of you for taking part in this discussion. I duly hotels. River cruises are becoming increasingly popular as tour- note your suggestions, particularly those relating to making ism in Myanmar expands, and this is a market we are keen to domestic airlines in this country profitable, as well as the no- explore further. tion of setting a civil aviation academy. Both will need to be Dr. Aung Tun Thet : Do you plan to introduce cargo services? priorities as we strive to build Myanmar’s airline industry. All of you mentioned that you felt that Myanmar’s tourist industry U Kyi Win : That’s a very good question. There are no domes- should remain owned and operated by Myanmar people rather tic air freight companies currently operating in Myanmar. De- than of foreigners, who might not be as knowledgeable about mand for air-freight services across the Asia-Pacific has gone Myanmar’s culture and unique characteristics as locals might down recently, due to a combination of decreased demand for be. I look forward to seeing where Myanmar’s airline industry manufactured goods and rising fuel prices. But there are nev- is headed, and I thank you all for your time. A ertheless prospects for future growth; Korean and Japanese

ACUMEN ⏐ 33 Opinion

yanmar has witnessed an exodus of workers over and despite the dangers involved, wages tend to be low. As the past few decades, and many of them have most economic migrants take whatever work they can get, they Mexpressed interest in returning now that recent are often forced to take jobs that do not grant them much dignity. political and economic reforms seem to be durable. In search of Myanmar’s foreign workers are a stoic bunch - they regularly greener pastures, Myanmar citizens have travelled far and wide endure bullying by abusive employers, sadistic overseers and to eke out a living, and many have come to reside permanently nasty co-workers without reacting negatively. They need to be in other countries. able to ignore the adverse aspects of their situation in order to Due to a lack of economic opportunities and political be able to stay abroad. As they have nobody else to depend on, repression in the past, Myanmar workers have fled in droves they are forced to submit to abuses handed down to them by in search of opportunities overseas. Much of what is available their employers abroad. These are facts that need to be discussed to them abroad is far from ideal, and in most cases they are openly, not shied away from. afforded few legal protections. Unskilled Myanmar workers While many Myanmar workers will undoubtedly choose to tend to do the dirty, difficult and dangerous jobs (known as the remain overseas, the recent changes in Myanmar have begun ‘3Ds’) in foreign countries that locals are reluctant to perform, to tempt some of these workers abroad to return home. Increased

34 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 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 transparency and government accountability has served to different sectors in the economy. People who have attained high- improve working conditions. Migrating abroad takes a toll on status jobs abroad may also see fit to return to take advantage of workers, because - regardless of their motivations for leaving - the tide of foreign investment that is set to enter Myanmar. Such being far from parents, friends and family is always difficult. As highly skilled workers will fuel Myanmar's economic growth the saying goes, ‘‘East or West, home is the best!" and serve to strengthen this country's nascent market economy. It is inevitable that much of Myanmar’s labour force abroad It makes intuitive sense that Myanmar workers abroad will is going to come home. There are millions of Myanmar workers return to the country as foreign direct investment comes in. If in neighbouring countries; some who started out as low-level workers at the bottom of the labour pool abroad are given the labourers have worked their way up the value chain to become chance to do demanding jobs at home with increased dignity, skilled technicians. Their efforts and expertise serve to improve they will be more productive in their efforts. the productivity of the foreign countries they live and work in; The government needs to begin preparations for how to Myanmar’s development process would benefit greatly if they best accommodate all the workers that are set to return in the were to bring their expertise back here. near future, and workers returning need to think about how Over the past three or four decades, an influx of cheap their skills can be best harnessed in the service of improving the foreign labour, from Myanmar and elsewhere into other countries nation. In time, Myanmar will be able to reclaim its rightful place in the region - Thailand and Malaysia, for example - has served in the community of Asian nations. A as a motor of economic growth for those economies. Wages for

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.

ACUMEN ⏐ 35 Opinion

nawrahta, the first historically-recognised emperor of Myanmar, was the son of King A 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 Sawrahan’s three queens, all sisters, who were named Taungpyin, Alaepyin, and Myaukpyin. Anawrahta’s mother was Myaukpyin, the youngest of the three sister-queens. At the time of Kunsaw Kyaungphyu’s 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 monk’s 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

36 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Soe was to replace him. In AD 986, Kyi Nyaung Oo Phi. After substantial prepara- what lessons his legacy can teach us that Soe succumbed to wounds sustained dur- tion, Anawrahta and his army marched are of use in the context of contemporary ing a deer hunt, and was succeded as king on Bagan, where he delivered an ultima- Myanmar. by Sukkatay, with Anawrahta serving as tum to Sukkatay. “Will you hand over the Anawrahta was able to consolidate the his deputy. Anawrahta’s mother also came throne to me, or shall we joust?” majority of the area that comprises mod- to reside at the palace, and was respon- Angered by this affront to his author- ern-day Myanmar into his empire, with sible for taking care of the new king. ity, king Sukkatay exclaimed, “I have noth- Bagan as its capital. Anawrahta’s domain, One day, King Sukkatay announced ing to fear from you! Anawrahta, who has which is generally accepted to have been his intention to hold a special session of always been weak and fragile, has dared the first Myanmar Empire, stretched from the royal court, and insinuated that to challenge me. Hah! My subjects, watch Kaungsin on Chinese border to the north, Anawrahta’s presence was vital. Perplexed me, I will emerge victorious from this joust.” all the way to Taninthayi and Dawei in by Sukkatay’s intentions, Anawhrata con- Sukkatay was killed in their ensuing the south. He constructed votive tablets all sulted with his father. “Sukkatay seeks your encounter, and Anawrahta, victorious, went over his land, and performed meritorious mother’s hand in marriage,” Kunsaw to his father at the monastery to offer him deeds while expanding the empire Kyaungphyu informed his son. the now-vacant throne. His father refused through warfare. Anawrahta, incensed, asked that his on grounds of his old age, and told But he was also able to strategically father give him the Arindamar Lance and Anawrahta that he should become the king influence other polities in the region and Thilawun Sword in his possession. His himself. forge alliances. In response to the father obliged, and also gave him a ruby With his father’s blessing, the conse- Hanthawaddy Kingdom’s request for as- ring, ruby-encrusted headgear and a royal cration ritual granting him the throne was sistance to help to fend off intruding Jun horse. He advised his son, “Head to the performed, and in this way Anawrahta (Khmer) armies, Anawrahta sent over his Popa region to raise an army and build inherited the throne at Bagan. Various troops, led by the four gallants who van- up your strength, then return to challenge sources claim that Anawrahta became king quished the invading Khmers in short or- your brother when you are well pre- in AD 1044, although this writer is per- der. pared.” haps not knowledgeable enough to inde- However, as the army returned to Anawrahta’s army brought many pendently verify the reliability of that date. Bagan, Kyansittha,the leading gallant, fell brave fighters into its fold at Popa, includ- As I am primarily a student of leader- in love with Kin Oo Manisnadar, a prin- ing the four famed gallants- Kyansittha, ship skills, I will try to analyse King cess from Bago who was being offered to Ngalone Letphae, Nga Htwayyu and Anawrahta’s management style, and see Anawrahta as a token of appreciation from

ACUMEN ⏐ 37 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- sittha’s 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 Kingdom’s strange that Anawrahta, a great victor over was notable for his forgiveness and southern counterpart. Bagan’s prestige and King Sukkatay in jousting, the builder of magnanimity. stature increased to such an extent dur- a vast empire through territorial expan- 3) He was a leader with foresight and ing Anawrahta’s tenure that the empire sion and diplomacy, and a wise and be- vision that was able to build the most was able to forge ties with political enti- nevolent monarch, could have be killed significant political dynasty that ties in India and Ceylon, and even sent by something as mundane as a wayward Myanmar had ever seen to that point, troops to help the Buddhist kingdom on buffalo.His military prowess must have and his legacy as a political leader is that island fend off the invading Chola earned him plenty of enemies over the still felt today. dynasty from South India. years. Aside from his skill in foreign affairs As is often the case when legends Ultimately, the successes or failures and diplomacy, Anawrahta also under- become incorporated into the historical of families, companies, or countries rest stood the need for good infrastructure, and record, he was most likely ambushed and on their leaders’ management skills. We built and maintained a vast network of killed by any one of his enemies, who in Myanmar should be proud of the first dams, channels and tanks for agriculture. may have been carrying flags adorned Myanmar Empire, brought about as it was The first Myanmar Empire’s strength was, with a buffalo figures or wearing head- through king Anawrahta’s strong leader- in no small part, due to the steady supply gear sporting buffalo horns. ship and vision. A of food that these infrastructure develop- Anawrahta’s leadership serves as a ments made possible. model for businesspeople in Myanmar References King Anawrahta passed away in AD today, and can be assessed as follows: 1) U Kala Maha Rajawan (Volume I) 1077, and may have been gored to death 1) He adored his gallants, and prided 2) The Glass Palace Chronicle by an errant buffalo, according to the some himself on the quality and efficiency (Supervised by Daw Kyan) chronicles dating to the period. I find it of those that surrounded him. 3) Khit-haung Myanmar Rajawan by 2) He was conscious of the filial grati- Dr. Than Tun tude he owed to his parents, and

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 Trump’s Ways to Success and 21 Essential Qualities of an Effective Leader, and publishes work in the April Star monthly magazine.

38 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Current

The final version of Myanmar’s long-awaited foreign direct investment law was passed by Parliament on November 2, 2012. How does Myanmar’s business community feel? We ask academics, entrepreneurs and other stakeholders for their thoughts.

ACUMEN ⏐ 39 Current

Dr. Maung Maung Lay Prof. Dr. Aung Tun Htet U Than Lwin Vice-President Senior Advisor Vice-President (Retired) UMFCCI UN Resident Coordinator’s Office Central Bank of Myanmar

I welcome the introduction of Domestic businessmen aren't The FDI law has largely the new FDI law, which will particularly concerned by the met the requirements of hopefully be implemented quickly new FDI law one way or another. foreign investors, but not entirely. The and successfully. In the interests of Although the law has eliminated the government has done as much as it attracting foreign investors, it's requirement that foreign investors be can, given what it has to work with significant and important that a the minority shareholder in joint at the moment. Foreign firms have suitable legal framework is now in ventures with Myanmar companies, become interested in Myanmar as a place. Now that there are proper foreign companies will still need to result of the legal changes here, and safeguards, foreign investors really rely on local partners to make sense have expressed interest in investing. have no excuse not to invest! of Myanmar’s business environment. But they point out that inadequate Understandably, would-be foreign Foreign investors enjoy technological infrastructure and political instability investors have complained in the advantages over their Myanmar make investment a risky proposition past that there was no clear-cut FDI counterparts, which should serve to at this point. Of course, there are law, but now the rules are much improve the efficiency of the banking some people who dislike the law. more straightforward. The invest- industry in this country. It’s also Domestic businesses are wary of ment climate in Myanmar is much important that domestic businessmen foreign competition, and as such have more favourable to foreigners than it and foreign investors alike act in a promoted protectionist policies. If we was not too long ago, but despite all socially responsible manner - if a are to favour domestic firms at the of the positive changes Myanmar has business venture enriches its expense of foreign companies, local gone through in recent years, investors at the expense of the companies will have no incentive to investors still face considerable country and its citizens, it’s detrimen- innovate or operate efficiently. All challenges. Corporate Social Respon- tal to social welfare and the things considered, the law should be sibility (CSR), in particular, is sustainability of economic growth. attractive to foreign investors. And as something that investors and Enterprises that are profitable and notions of corporate social responsi- companies need to be mindful of. So contribute to the country’s well-being bility become the norm, we should long as foreign investors are are what I want to see, and are see increasing numbers of firms responsible in their practices, and what the FDI law seeks to promote. adopting such practices, which should are transparent and accountable in Given its aims, the FDI law is very affect Myanmar’s investment climate their dealings, they will be warmly much appreciated. A for the better. A welcomed to Myanmar. A

40 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 U Kyaw Kyaw Hlaing Prof. U Maw Than U Kyaw Tin Managing Director Chairman Professor (Retired) SMART Group of Companies Yangon Institute of Economics SGS Myanmar Ltd.

I am quite pleased that FDI law has FDI laws in Myanmar have One of the new FDI law’s passed, as it should serve to prevent been liberalized to attract weakest points is the amount environmental degradation and allow for foreign investors, which should benefit of authority given to the MIC ethnic minorities to maintain their cultures domestic and foreign firms alike even (Myanmar Investment Commission). and traditions. Industrial waste, for instance, if there is competition between them. Foreigners can operate in sectors will be more difficult to dispose of improp- To that end, the laws surrounding otherwise restricted to domestic erly under the new legal regime. The five- foreign investment can’t be established companies entirely at the behest of year tax holiday accorded to foreign in- in a bubble - there needs to be input the MIC. As the MIC demands vestors should make investing in Myanmar from both foreign and domestic openness and transparency from very attractive; barriers to entry are mini- stakeholders. The law needs to speed foreign companies operating in mized when raw materials and machin- the development process, enshrine the Myanmar, it too must behave in an ery can be imported duty-free. And this legal rights of businesses, and ensure open and transparent manner. At attractiveness builds on itself: the more for- that the benefits of foreign investment the end if the day, there is no eign companies invest, the more they’ll want extend to all people in the country. To difference between Myanmar and to invest because of the advantages they’ll a degree, we, as Myanmar business- foreign companies in my mind. come to enjoy here. Besides, exporters are people and investors, will need to What’s most important is for foreign entitled to substantial export tax relief. In favour our own for a while, but we and domestic stakeholders to term of job opportunities, the law allows will eventually be able to compete with develop strong relationships, which foreign companies to hire foreigners eas- foreign firms as our capacity to do so will result in mutually beneficial ily to fill skilled positions, instead of forcing grows. The provisions of the new law outcomes over time. In terms of the them to rely on local labour pools where granting foreign firms a five-year tax investment law itself, I think it’s skilled workers may not be readily avail- holiday should serve to attract foreign generally fair. I am worried that a able. In my opinion, Myanmar is ripe for firms to a much greater degree than rush of foreign investment will do investment. There are plenty of natural re- before. Likewise, foreign companies irreversible damage to Myanmar’s sources and raw materials here, and could, in the past, only lease land from cultures and traditions, and result in Myanmar’s workforce is diligent and the government, but are now permit- severe environmental degradation. perseverant. And thankfully, things seem ted to lease property from authorised Responsible investment can only do to be changing for the better. I look at the private owners directly. I think that positive things for this country, but new FDI law positively, but it’s also impor- this law should benefit Myanmar’s we have to be wary of letting in any tant that companies are clean and trans- entire business community, both and all would-be investors without parent in their dealings and operations. A foreign and domestic. A inspecting their track records first. A ACUMEN ⏐ 41 Current

U Kyaw Khine U Min Sein Mrigank Ojha President and CEO Managing Partner Managing Director Myanmar A-Hla Construction Co., Ltd. Min Sein Law Firm Exponent Global Consulting Pte Ltd. (Singapore)

The FDI law that was recently The recent FDI law enacted by the That the Myanmar government passed was, clearly, intended to government here is better than the recently reformed the rules attract foreign investment. And it doesn't previous legal regime for FDI, and is surrounding foreign direct investment is stipulate how much or little a foreign firm much better than the FDI laws in other a positive development, and these needs to invest. The foreign investment countries. The FDI law is fair to both reforms will be, by and large, beneficial. I law grants foreign firms a five-year tax parties in joint ventures, both domestic think these reforms will attract plenty of holiday, and, if the venture fails, it will be and foreign. In the past, even though investment to Myanmar, and will act as a granted a further three years’ reprieve. contracts between parties were signed, catalyst for this country’s development. It Although the government is worried that there could be no assurance that these will give SMEs (small and medium competition from abroad will hamper the would be upheld, as the rule of law has enterprises) and large businesses alike ability of Myanmar businesses to com- historically been weak. Arbitration can the ability to invest in Myanmar securely pete, the law is a positive development provide a way around this problem. for the first time. Foreign companies are for Myanmar people. Although our Internationally, contracts with arbitration keen to invest in the service sector and government’s openness has received clauses are the norm. This can help manufacturing, which should serve to some accolades, there is more that needs avoid protracted battles in court if one improve those sectors’ international to be done. And even though some side chooses to violate the terms of a competitiveness. As the protections sanctions have been eased, there are still contract. Myanmar has not yet signed on foreign investors are entitled to are now many that need to be removed. Ameri- to the 1958 New York Convention, which clearly spelled out in law, the FDI law can sanctions, specifically: as the largest established an accepted international serves as a much-needed point of economy in the world, American standard for binding arbitration; the reference for foreign investors unaccus- investment in Myanmar can - and should government would be wise to do so in tomed to doing business in Myanmar. It’s - flourish if the US and Myanmar are to the interests of promoting the rule of law fascinating, really. Overall, I’m optimistic. I develop strong bilateral ties. Of course, and investor confidence. In essence, our think things will be better from here on the process that will bring widespread legal system is quite similar to that of out. As for our business, we’re undecided Western investment into this country is Malaysia and Singapore, based as it is on as to whether we should open a currently in still in its earliest stages, but I English Common Law. If the legal system subsidiary in Myanmar now or wait for a am convinced that, in time, the situation is reformed properly, foreign investors little while. Regardless, Myanmar is a will improve and stablise. A will be able to take advantage of the place of opportunity; foreign investors great business opportunities Myanmar should be pleased to invest here. A offers. Recent improvements to the banking system should also serve to improve investor confidence. A 42 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 Dr. George Soe Win U Min Ko Oo U Aung Kyaw Moe U Tin Zan Kyaw Independent Economic & Managing Director Director Principal Business Advisor and Myat Noe Oo Co., Ltd Client Focus Co., Ltd. Device Business Consultant Management Academy

This FDI law is really Myanmar’s FDI laws It’s clear that the President U Thein flexible. It’s designed are different from those government is serious Sein has signed and to make things as easy as of other countries. In most about attracting foreign approved a foreign invest- possible for foreign investors. countries, domestic partners investment. The laws are ment bill, which has recently But despite this, foreign are required to be the clearly defined now, which been passed by the parlia- investors aren’t going to be majority shareholders in any they were not before, so ment. In an earlier draft of rushing in any time soon, as joint venture. The most there’s no doubt in my mind the bill, foreigners were this country’s infrastructure is important part of Myanmar’s that things will work out. limited to a 50% stake in joint primitive and its legal new FDI law is that domestic Foreign companies have ventures with Myanmar system is unsophisticated. I and foreign investors can deemed the law flexible and citizens. Now, there is no limit honestly welcome this negotiate the share of fair. So, in general, I feel that on the percentage foreigners newly-reformed FDI law. investment without restric- foreign investment is a feasible are allowed to own, which And I think that we can tions. This is something that prospect at this time. Obviously, should grant both sides more look forward to plenty of investors find extremely though, the fact that the law negotiating room. I think this growth and opportunity, interesting. Industry input was has been signed into law FDI law has received a stamp which this law should be instrumental in getting this doesn’t mean that all problems of approval from scholars, able to facilitate. It should law passed. The provisions of have been solved overnight. Parliament and the President provide an equality of what eventually became the We’re going to have to wait alike, which is, in and of itself, opportunity for both sides, FDI law were discussed, and see what the outcome of good progress. And foreign and it is much better than debated and examined by this process of reform is going investment is coming, which what preceded it. But when businessmen, the UMFCCI to be. While things seem great will create job opportunities in foreign companies start to (Union of Myanmar Federa- on paper, we’re going to have this country. When foreign set up shop here, they’ll still tion of Chambers of Com- to ascertain whether or not companies start their opera- encounter problems when it merce and Industry), and in things are fair and equitable in tions, they will be required to comes to sourcing skilled Parliament, through multiple practice. I think that, at least hire local employees, gradu- labour and dealing with the readings. The final draft was theoretically, this FDI law is ates and skilled workers - at bureaucracy - which is itself reached after much delibera- quite fair for both domestic and least 25% in the first year, 50 being reformed during this tion and thought, and as such foreign investors. The law has percent in the second year period of transition. A it should be well suited for been enacted, but we haven’t and 75% in their third year of Myanmar’s current economic seen its effects in practice - yet. operation. I warmly welcome needs. I hope our country will But at the very least, the law them. A eventually be as successful as seems to safeguard the Malaysia, which owes much interests of the country and its of its current economic success people, and appears to be to foreign direct investment. A flexible enough to suit ACUMEN ⏐ 43 Myanmar’s needs. A New Project

44 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 ifestyle is an important factor when it comes to L assessing a country’s 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 Myanmar’s second-largest city, serves as an example of the kind of sophistication Myanmar’s 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 project’s principal inves- tors, to discuss Mingalar Mandalay and the state of urban development projects in Myanmar.

ACUMEN ⏐ 45 New Project

Mingalaba, Ko Zin Min Swe. First of shopping centre, which will contain a all, how did the idea for the Mingalar supermarket as well as a carpark that Mandalay project come about? can holdup to 1,000 cars and 3,000 mo- The idea came out of a meeting be- torcycles. tween 34 construction companies that had The upper floors of the building will been granted construction licenses to build have space for other shops, including a within Mandalay city limits. The govern- cinema and game centre. On the ground ment invited offers to develop a large- floor will be a food court, offering both scale urban development project, which Myanmar and foreign cuisine. The three- will include supporting nodes for the 2013 star hotel owned by the City Develop- Southeast Asian Games (SEA Games), ment Committee will be close by, and be- apartment buildings, and shopping cen- hind it we will build another nine-story tres. Given its scale, the project needed condo containing 48 units, behind which to be implemented by a consortium of various offices providing government ser- investors. So CAD (Construction and vices will also be built. Decoration Co., Ltd. from Singapore) and New Star Light tendered for the project What other interesting features do you together. plan to incorporate? We’ve planned out a pedestrian mall, It’s a state-run project, isn’t it? and we will need to focus on attractive We’ve been given our mandate by the state, but we’re in charge of planning and execution; we’re 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 terials with a uniquely Myanmar sense operate, and the other puts in money and of style. We’re going to create a model labour, and we’ve agreed on how to share city by drawing on the expertise of inter- the results. national experts in the field, a city com- plete with proper underground water The project site is off 73rd Street, be- pipes, cables, security and fire-fighting tween Thazin and Ngughwewa streets, systems. We’ve also thought of develop- New Town and No. 1, Chan Mya Thasi ing a secondary CBD (Central Business Township in Mandalay, correct? Did District) for Mandalay, establishing you choose the site? Or did the City Mingalar Mandalay as another self-con- Development Committee allocate it to tained commercial node within the city. you? The site was already chosen for us, How large in scope is the project? And because the main part of the International how is it going to be implemented? Sports Village for the SEA Games is go- The project consists of two parts: a ing to be built right across from it. residential zone and a commercial zone. The residential zone will consist of 69 What led you to make this investment? plots of land, as well as a nine-storey con- I was motivated by my desire to help dominium containing 96 apartments, and plan out Mandalay’s urban development, in the middle of the residential zone we and to play a supporting role in the 2013 will build a four-star hotel. The commer- SEA Games. Development projects in cial zone will not be strictly commercial, Mandalay have never historically been as it will also be home to 127 residential up to international standards, so we want units, 30 of which will have elevators in- to meld high-quality construction and ma- stalled. We intend to build a five-story

46 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 landscaping to create usable green space. Effective management is essential style. Much of the infrastructure develop- Nightlife is also something we intend to when you have to supervise a large num- ment is being undertaken by Guthrie En- focus on. ber of workers. We have a total of 24 gineering, which we have hired to take engineers in charge of implementing the charge of monitoring and evaluation Are CAD and New Star Light the only project; our initial investment was 91 bil- (M&E). two companies in your consortium? lion kyats. What is the state of construction at the What sort of concept did you have in moment, and how big is your budget? What designs do you have in mind for mind when planning out the project? Yes, just the two of us - we have no the buildings? Are they going to reflect I felt it was important to plan out a plans to offer shares in the project. Con- a unique sense of style? community that fit well within the con- struction has been ongoing since Septem- CAD came up with the designs in text of Mandalay’s existing urban envi- ber 5, 2012, and we’ve almost finished conjunction with SCP (an urban planning ronment. The city has a growing traffic laying the foundations for the commer- and design firm) from Singapore. We problem, which is an issue Mandalay cial properties. We have over 2,000 con- came up with the first batch of designs, shares with most developing cities. struction workers working on a daily ba- they modified them, and we ultimately There’s so much traffic in Mandalay be- sis, and have a lot of machinery at our had to change what they came up with cause of the city’s importance as a com- disposal, including our own cement mix- before we started construction. We felt it mercial hub, as well as the large number ers. When necessary, we hire workers unwise to leave the entire process in the of schools and army installations in and from outside on a temporary basis. hands of foreign contractors, as they are around the city. We thought it important unlikely to be familiar with Myanmar 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.

What’s 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. We’ve 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 you’ll 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-

ACUMEN ⏐ 47 New Project

tation is important in business – we’ll 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 project’s 47 acre footprint; we’ve 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 we’re 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 we’ve done our best to deal with such contingencies as they might arise. evaluation engineers, so we’ve hired 12 incorporate state-of-the-art safety equip- from Guthrie Co. to do supervisory work. ment, which is going to be provided by Was the area formerly rice paddy Guthrie. fields? Much has been made of the problems What differentiates a condominium No, but I believe that there used to faced by condo developers in Myanmar, from other kinds of high-rise dwellings? be rice paddies just south of our construc- such as power shortages, water sup- A condominium is a high-rise apart- tion site. ply issues, and inadequate parking. ment building that includes a high level How much can you do to address these of facilities. Condos do not necessarily What’s the ratio of local technicians to problems? need to be of a certain height, so a 4-story foreign technicians working on the The regulations that govern condo- building might well be called a condo if project? minium development say that a condo its facilities fit the bill. The services our Civil engineering work is done by must be located on a plot at least one condos will offer include treatment cen- our local engineers, who have an impec- acre in size. Our condos will have plots tres, pools, gymnasiums, tennis courts, cable safety record. There is no record of of about three acres each our 96 unit playgrounds, and 24-hour security, among buildings on their watch collapsing while condo has parking spaces for 140 cars. other amenities. As far as the industry in still being under construction, as has hap- We’re building two artesian wells to ad- general is concerned, there are about a pened recently in China. Despite this, we dress water issues. Moreover, we’re in- dozen types of condos, including service still don’t have enough monitoring and stalling generators for every unit in case condos, holiday condos, and resort con- the power goes out. The elevators will

48 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 able middle class. Here, things are still when it comes to construction, because too unequal. We’re building this project foreign firms simply won’t be able to op- to international standards, and so the best erate without relying on local labour pools we can hope for when it comes to those and expertise. at the bottom is to provide them with Economies change. In Thailand, when meaningful employment opportunities. foreign investors such as Seven-Eleven came in, a considerable number of pri- This project is an enormous undertak- vate, mom-and-pop stores disappeared. ing. Who’s going to be responsible for But in the end that wasn’t a huge prob- management? Do you think Myanmar lem, as many shop owners took out fran- people are capable of doing so? chises with the chain. As far as Myanmar That hasn’t been decided yet. But, is concerned, however, I don’t see Seven- clearly, we will delegate the task to com- Eleven growing by leaps and bounds, as petent and efficient managers. Condo cul- there simply aren’t enough domestically ture, although already familiar to produced products around of a sufficiently Yangonites, is still new to people in high quality to fill their shelves. Mandalay. I think it makes sense to start with an experienced foreign management Do you plan to enforce a foreigner-to- team before our people will be able to do local ratio when it comes to apartment it on their own. If necessary, we will seek sales? help from abroad. I think it’s more a matter of what- ever policy the government sets. As far How much foreign investment do you as we’re concerned, it’ll be first come, first expect to see in the construction sec- serve. Local buyers might choose to re- tor? Is there any likelihood that foreign- sell properties at a significant markup to ers will come to dominate construction foreign buyers, but that’s not something and real estate in Myanmar? we can or want to have control over. All It all depends on how attractive the that matters is that those that buy and government’s investment policies will be sell property don’t do so in a way that’s to foreign companies. Representatives detrimental to the national interest. from large multinational retailers – like Seven-Eleven or McDonald’s - will most What changes can we expect to the dos. The products we offer fall under the likely buy apartments like these if they city of Mandalay once your project is category of residential condo. choose to open up operations in Myanmar, finished? and locals that have already purchased Our construction site was empty land Are advance purchases of commercial condos or commercial properties might before we decided to repurpose it. or retail properties allowed? Have you then choose to resell at a profit. As things Mandalay has gradually expanded south- fixed the prices for them? Who are stand today, foreign companies are un- ward, and our project is a key part of your target customers? likely to launch hundred-percent-foreign- that southward expansion. Post-project Lots of people have offered to buy owned subsidiaries in Myanmar, and will Mandalay will be a place of greater busi- in advance. They’re looking to buy resi- instead still choose to partner with local ness opportunity than it is now. Quality dential plots, in particular, as well as store- companies. of life will increase – there will be many front properties. We expect to start sales But will they come to rule the roost more amenities on offer, such as quality – about 30 percent of the total develop- over time? Not necessarily. Look at China restaurants and entertainment venues. Life ment, at first – in February or March. As under Deng Xiaoping, for example. For- in contemporary Mandalay is an mix of far as our target market is concerned, eign investors were allowed to set up op- rural and urban, past and present; there’s a wide gap between the haves erations without partnering with domes- Mingalar Mandalay will add a much- and the have-nots in this country. We have tic firms, and that hasn’t affected Chinese needed veneer of sophistication to Man- a lower proportion of middle-class people companies’ ability to grow. Same goes for dalay’s already-rich cultural heritage. A than does Singapore, for example, which, Thailand. While local firms in some sec- like other developed countries, has a size- tors might lose out, that won’t be the case

ACUMEN ⏐ 49 Dining Out

⏐ April 2013 5050 ⏐ ACUMEN ACUMEN www.myanmarb2bmagazine.com www.myanmarb2bmagazine.com April 2013 A few weekends ago, after a day spent walk- world’s most highly regarded coffees originate. ing around Yangon’s city centre, I was in search Prices are reasonable, with a cup of coffee start- of a quiet place to have a rest – preferably, some- ing at K1800. where I could find an ice-cold coffee. In the evening, Jasper House hosts live The Jasper House restaurant, located at music, which has been a constant throughout the the corner of Ahlone and Baho streets in Dagon six months that the restaurant has been open. Township, fit the bill nicely. As soon as I en- Open from 9:00 AM to 11:00 PM daily, Jas- tered the compound, with its beautiful green per House is a fantastic addition to Yangon’s grass, pleasant peaceful waterfall and small burgeoning restaurant scene, with its quality food, lake, my tiredness faded away. tranquil atmosphere and excellent service. A 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 restaurant’s 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 restaurant’s 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 House’s coffee is imported from Doi Chang in Northern Thailand, from where some of the

ACUMEN ⏐ ⏐ 5151 CultureCulture

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 harapar Library is a Yangon-based not- sectors of society. U Ye Htet Oo is driven for-profit library and educational founda- to bring the Tharapar Library up to inter- tion that has received accolades interna- national standards, and is constantly striv- tionally for its work. ing to improve the diversity and quality U Ye Htet Oo, the chief librarian and of his collection. founder, opened the library in early 2009 to serve disadvantaged individuals for Books on the Shelves whom access to books – both in Myanmar The library’s name is a reference to and English- would otherwise be diffi- Tharapar Gate, a famous entrance to the cult. We sat down with him and discussed ancient city of Bagan. Naming the library his organization’s history, current activi- after a gate was intended to be a meta- ties and his plans for the future. phor for learning, U Ye Htet Oo explained. 52 ⏐ TACUMEN www.myanmarb2bmagazine.com April 2013 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 library’s collection. One tests – including the SAT, IELTS, GRE and third of the English books in the library GMAT – U Ye Htet Oo hopes that the li- come from U Ye Htet Oo’s personal col- brary will be able to prepare local stu- lection. The Asia Foundation and the dents with the tools they will need to make Membership Myanmar Book Centre also contributed it into foreign colleges and universities. In order to keep the library as acces- substantial amounts of English language sible as possible, Tharapar charges a mere material, but as donors have not been as Special events and training courses 2,000 kyats for an annual membership. keen to donate Myanmar-language books, In conjunction with the American Cen- Money isn’t a barrier to membership the library has purchased most of those tre in Yangon, the library conducts though, as the library offers access free of directly. weeklong courses on literature and library charge to those that can’t afford the an- The library has established four mo- science. The library also offers English nual fee. The library also offers free mem- bile book centres, with collections of 500- language learning classes at monasteries bership to clergy members of all faiths. 1000 each, to service poor areas outside around the city. To facilitate open dialogue While most of the library’s collection is of Yangon. As part of its commitment to and the sharing of ideas, the library available to borrow in blocks of ten days providing accessibility to education, the li- organises open forums between Myanmar at a time, the library’s collection of rare brary also offers a wide variety of students studying in American universi- books cannot be borrowed. standardised test preparation material ties and their local counterparts, which For more information, contact the and coaching. By offering local students are held two or three times per year. Tharapar Library and U Ye Htet Oo at the ability to study for these international 095060376. A

ACUMEN ⏐ 53 International Flight Schedules

DAYS FLIGHT DEP ARRI DAYS FLIGHT DEP ARRI DAYS FLIGHT DEP ARRI

Yangon - Bangkok (BKK) MI - 518 14:20 15:45 Yangon - Beijing 3K - 585 09:10 10:40 DAILY TG - 302 14:45 16:40 FRI 8M - 234 19:15 20:45 TUE CA - 906 14:15 21:55 TG - 304 09:50 11:45 MI - 520 22:10 23:35 WED CA - 906 14:15 21:55 TG - 306 19:40 21:35 SAT 8M - 234 19:15 20:45 THU CA - 906 14:15 21:55 PG - 702 10:45 12:40 SUN 8M - 234 19:15 20:45 SAT CA - 906 14:15 21:55 PG - 704 18:45 20:40 MI - 520 22:10 23:35 SUN CA - 906 14:15 21:55 PG - 706 07:15 09:30 Yangon - Siem Reap Beijing - Yangon Bangkok (BKK) - Yangon MON 8M - 401 17:05 19:15 TUE CA - 905 08:05 13:15 DAILY TG - 301 13:00 13:45 FRI 8M - 401 17:05 19:15 WED CA - 905 08:05 13:15 TG - 303 08:00 08:45 THU CA - 905 08:05 13:15 TG - 305 17:55 18:40 Siem Reap - Yangon SAT CA - 905 08:05 13:15 PG - 701 09:05 09:55 SUN CA - 905 08:05 13:15 PG - 703 17:05 17:55 MON 8M - 402 20:15 21:15 PG - 705 20:15 21:30 FRI 8M - 402 20:15 21:15 Yangon - Guangzhou

Yangon - Bangok (DMK) Yangon - Phnom Penh WED CZ - 3056 11:20 15:50 SAT CZ - 3056 11:20 15:50 DAILY FD - 2752 08:30 10:20 WED 8M - 403 16:45 19:10 MON CZ - 3056 17:40 22:15 FD - 2754 17:35 19:25 SAT 8M - 403 16:45 19:10 FRI CZ - 3056 17:40 22:15 FD - 2756 12:50 14:40 Phnom Penh - Yangon Guangzhou - Yangon Bangkok (DMK) - Yangon WED 8M - 404 20:10 21:35 WED CZ - 3055 08:40 10:30 DAILY FD - 2751 07:15 8:00 SAT 8M - 404 20:10 21:35 SAT CZ - 3055 08:40 10:30 FD - 2753 16:20 17:05 MON CZ - 3055 14:45 16:35 FD - 2755 11:35 12:20 Yangon - Taipei FRI CZ - 3055 14:45 16:35

Yangon - Kuala Lumpur MON CI - 7916 10:50 16:10 Yangon - Chiang Mai TUE CI - 7916 10:50 16:10 DAILY AK - 1421 17:15 21:30 WED CI - 7916 10:50 16:10 THU W9 - 9607 14:50 6:2960 AK - 1425 08:30 12:45 THU CI - 7916 10:50 16:10 SUN W9 - 9607 16:50 18:40 DAILY MH - 441 12:15 16:30 FRI CI - 7916 10:50 16:10 SAT CI - 7916 10:50 16:10 Chiang Mai - Yangon

Kuala Lumpur - Yangon Taipei - Yangon SUN W9 - 9608 17:20 17:50 THU W9 - 9608 19:40 20:30 DAILY AK - 1420 15:40 16:45 MON CI - 7915 07:00 95:00 AK - 1421 17:15 21:30 TUE CI - 7915 07:00 95:00 Yangon - Kunming MH - 740 10:05 11:15 WED CI - 7915 07:00 95:00 THU CI - 7915 07:00 95:00 DAILY MU - 2032 14:40 18:00 Yangon - Singapore FRI CI - 7915 07:00 95:00 SAT CI - 7915 07:00 95:00 Kunming - Yangon DAILY 8M - 231 07:55 12:25 8M - 6232 11:30 16:05 Yangon - Kunming DAILY MU - 2031 13:30 14:00 SQ - 997 10:25 14:45 DAILY 3K - 586 11:30 16:05 TUE CA - 906 14:15 17:35 Yangon - Hanoi MON MI - 517 16:40 21:15 WED CA - 906 14:15 17:35 MI - 509 00:25 05:00 THU CA - 906 14:15 17:35 DAILY VN -956 19:10 21:30 FRI 8M - 233 13:20 17:55 SAT CA - 906 14:15 17:35 SAT 8M - 233 13:20 17:55 SUN CA - 906 14:15 17:35 Hanoi - Yangon MI - 517 16:40 21:15 MI - 509 00:25 05:00 Kunming - Yangon DAILY VN - 957 16:35 18:10 SUN 8M - 233 13:20 17:55 TUE CA - 905 13:00 13:15 Yangon - Ho Chi Minh City Singapore - Yangon WED CA - 905 13:00 13:15 SAT CA - 905 13:00 13:15 TUE VN - 942 14:25 17:10 DAILY 8M -232 14:10 15:40 SUN CA - 905 13:00 13:15 THU VN - 942 14:25 17:10 8M - 6231 09:10 10:40 SAT VN - 942 14:25 17:10 SQ - 998 07:55 09:20 SUN VN - 942 14:25 17:10

54 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013 DAYS FLIGHT DEP ARRI DAYS FLIGHT DEP ARRI DAYS FLIGHT DEP ARRI

Ho Chi Minh City - Yangon Tokyo (NRT) - Yangon WED W9 - 120 12:40 15:40 FRI W9 - 117 13:55 16:20 TUE VN - 943 11:40 13:25 WED NH - 913 11:10 17:05 SAT W9 - 120 12:40 15:40 THU VN - 943 11:40 13:25 SUN W9 - 117 13:55 16:20 SAT VN - 943 11:40 13:25 Yangon - Taipei SUN VN - 943 11:40 13:25 Mandalay - Myitkyina TUE BR - 288 11:35 17:20 FRI BR - 288 11:35 17:20 TUE W9 - 252 12:15 13:22 Yangon - Hong Kong SAT BR - 288 11:35 17:20 THU W9 - 112 15:30 16:40 FRI W9 - 255 14:45 15:55 MON KA - 251 01:00 06:00 Taipei - Yangon SUN W9 - 252 12:15 13:22 TUE KA - 251 01:00 06:00 THU KA - 251 01:00 06:00 TUE BR - 287 07:30 10:35 Mandalay - Puta-o SAT KA - 251 01:00 06:00 FRI BR - 287 07:30 10:35 SAT BR - 287 07:30 10:35 TUE W9 - 252 12:15 14:35 SUN W9 - 252 12:15 14:35 Hong Kong - Yangon Mandalay - Yangon Mandalay - Tachileik MON KA -252 21:35 23:35 DAILY W9 - 143 09:20 10:45 WED KA -252 21:35 23:35 W9 - 011 08:50 10:30 MON W9 - 120 12:40 13:50 FRI KA -252 21:35 23:35 MON W9 - 120 1640 18:05 WED W9 - 120 12:40 13:50 SUN KA -252 21:35 23:35 W9 - 015 12:20 13:20 THU W9 - 113 12:40 13:50 W9 - 109 16:30 17:30 FRI W9 - 117 13:55 15:05 Yangon - Frankfurt TUE W9 - 252 17:35 19:00 SAT W9 - 120 12:40 13:50 W9 - 015 12:20 13:20 SUN W9 - 117 13:55 15:05 WED DE - 2369 05:35 16:40 THU W9 - 109 16:30 17:30 WED W9 - 120 16:40 18:05 Mandalay - Kengtung Frankfurt - Yangon W9 - 129 17:55 20:00 THU W9 - 113 18:30 19:55 MON W9 - 120 12:40 14:30 TUE DE - 2368 12:40 04:25+1 W9 - 129 17:55 20:00 WED W9 - 120 12:40 14:30 W9 - 015 12:20 13:20 SAT W9 - 120 12:40 14:30 Yangon - Mandalay FRI W9 - 256 17:45 19:10 W9 - 117 17:20 18:45 Nyaung Oo - Yangon DAILY MU - 2029 14:00 13:50 FRI W9 - 015 12:20 13:20 W9 - 109 16:30 17:30 DAILY W9 - 141 08:05 11:05 Mandalay - Kunming SAT W9 - 120 16:40 18:05 W9 - 143 08:35 10:45 W9 - 109 16:30 17:30 W9 - 205 08:25 09:45 DAILY MU - 2030 14:40 17:20 W9 - 009 13:00 14:00 MON W9 - 211 18:25 19:45 SUN W9 - 117 17:20 18:45 TUE W9 - 211 18:25 19:45 Yangon - Incheon W9 - 252 17:35 19:00 WED W9 - 129 18:40 20:00 W9 - 129 17:55 20:00 THU W9 - 129 18:40 20:00 DAILY KE - 472 00:05 08:00 W9 - 015 12:20 13:20 FRI W9 - 211 18:25 19:45 THU 0Z - 7463 00:50 08:50 SAT W9 - 211 18:25 19:45 SUN 0Z - 7463 00:50 08:50 W9 - 009 12:15 14:00 Mandalay - Nyaung Oo SUN W9 - 129 18:40 20:00 Incheon - Yangon DAILY W9 - 205 07:40 09:45 Nyaung Oo - Mandalay DAILY KE - 471 18:40 22:55 MON W9 - 211 17:40 19:45 WED 0Z - 7453 19:30 23:40 TUE W9 - 211 17:40 19:45 DALIY W9 - 143 08:35 09:05 SAT 0Z - 7453 19:30 23:40 WED W9 - 129 17:55 18:25 SAT W9 - 009 12:15 12:40 W9 - 120 12:40 15:40 Yangon - Doha THU W9 - 129 17:55 18:25 FRI W9 - 211 17:40 19:45 Nyaung Oo - Heho DAILY QR - 619 08:00 11:45 SAT W9 - 211 17:40 19:45 W9 - 120 12:40 15:40 DAILY W9 - 141 08:05 08:45 Doha - Yangon SUN W9 - 129 17:55 18:25

DAILY QR - 61821:05 06:29+1 Mandalay - Heho Nyaung Oo - Thandwe

Yangon - Tokyo (NRT) DAILY W9 - 011 08:50 09:15 DAILY W9 - 141 08:05 10:00 MON W9 - 120 12:40 15:40 WED NH - 91422:00 06:40+1

ACUMEN ⏐ 55 Cartoon

56 ⏐ ACUMEN www.myanmarb2bmagazine.com April 2013