investment opportunities in THE 2013 myanmar vietnam SEA GAMES agriculture today

Page 16 Page 18 Page 30 Myanmar Insider This Month’s Insider News on Business, Luxury, Real Estate, Lifestyle & Leisure Volume 1 • Issue 2 • December - January 2014 1200 KYATS INSIDe insider

Investing in Rubies p.5 Rubies are unquestionably the most sought after of all the precious gemstones in the world, and amongst the most expensive. There are only a few countries in the world that produce rubies, with Myanmar being the industry leader, generating over 80 percent of the world’s supply of precious rubies.

Progress for Ooredoo p.27 Professional Insider Digicel Asian Holdings, comprised of the Digicel Group, the First Myanmar Investment Co. Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Moe Kyaw Myanmar. We understand from management sources that detailed terms regarding ownership and capital outlay for the consortium Cover story, P.8 are still being negotiated and will be announced in due time.

Five of the Finest - Luxury Bags p.26

Like most things in life, exclusivity leads to desirability. If what you want is not immediately available, then the desire for he tale of how winning a competition in 1997 led to a trip to Manila and a career in the object intensifies until you just need to have it. Such is the accountancy. The Managing Partner of Win Thin & Associates tells the Myanmar Insider of case with beautiful and elegant luxury bags. T his journey to the top of his profession and his view on the tremendous opportunities ahead.

www.myanmarinsider.com www.facebook.com/TheMyanmarInsider www.twitter.com/MyanmarInsider Insider Info 2 www.myanmarinsider.com The Myanmar Insider www.myanmarinsider.com The Myanmar Insider Volume 1 • Issue 2 • December - January 2014 Welcome to our second and special joint December/January issue.

I would like to personally thank all of our readers who took the time to email me with their views and Editor in Chief Creative Design & thoughts on the inaugural November issue; we are always keen to receive feedback, as it lets us know what Victor Jeffery Layout people really want to read about. Email: [email protected] Global Integrated Media (HK) Ltd www.globalintmedia.com I can honestly say that the issue was a success, but let’s not rest on our laurels. Although this is still only DEPUTY Editor our second issue, we’ve already decided to increase the number of pages to give you a more exciting and Daw Khin Thu Zar Aung Advertising Manager informative read, and also make the switch to printing on higher quality glossy paper, so as to further Travis Okar Swe distinguish ourselves from the other journals in town. Sub Editors Tel: 09448537776 Kyaw Zaw Shwe Email: [email protected] I sincerely hope that you enjoy the changes and please drop me an email (see left) to let me know what Mark Wayne you think about the Myanmar Insider. Advertising Executives Staff Writers Phyo Naing Win As always, happy reading. Naw Thee Zun Tel: 09420011184 Charles Greene [email protected] Vic Jeffery Isaac Malone Crystal Phyu Phyu Thant Tel: 0943188691 Columnists Tancy Thwel Khaing Zin Jeremy Kloiser-Jones Tel: 095123952 Seamus Donoghue Email: [email protected] Myanmar’s Contributors Traffic Manager Jack Sheehan Cristy Villarosa William Greenlee Anthony Parker Digital Manager Myint Thandar Kyan Arnel Mojica Shwe Sin Hnin Best Aung Ko Ko Chit Market Research Business Read Shalini Mitra Manager Malcolm Macpherson Aung Soe San Wes L. Byron Simon Harrall Circulation Chris Pockette Yar Saw Henry Ossafagogfa Brent Potter Publisher John G. Newark Dr Tin Maung Thu Mae Anacay Yangon Office Media Director 15-B, Dharma Zedi Road Stephen Jeffery Dagon Township Yangon Photo Editor Tel:(+951) 526 165 Alistair Kleine Email: [email protected] www.myanmarinsider.com Production Manager Sam Nguyen Registration No: 04771

Art Director Timmy Wong

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By Simon Harrall - Managing Director, Global Fiduciary Solutions (HK) Ltd.

anuary 2013 was a cold day in the British no funding limits, Australia and the UK have Virgin Islands (BVI); it was like the day funding caps, so you can over fund a pension Jin 1940s Europe when the Nazis forced (which sounds odd to me). Czechoslovakia into annexation, but this day in Certain types of Hong Kong corporate January the BVI acceded to a treaty of submission pensions have no such limits and in the main for full disclosure of the names and addresses, have no investment restrictions either (anyone as well as the assets of, BVI companies for those can have one), so it doesn’t actually matter people who have nominee (hidden) property where you live and work; Hong Kong has no and cash held by BVI companies. taxes on investment anyway, and pensions in The result has been fines and imprisonment Hong Kong have no limits on what company for the people who have held such BVI companies. can take out the pension - in other words you The “storm troopers” (global taxmen) are marching can have a holding company that doesn’t even to your door, so hide the silverware! This is just the trade, and which then sponsors the corporate beginning of global tax transparency and it’s gone pension. crazy, which includes the new UK computer system These pensions in the main are also exempted (therefore every country’s, by the way), which uses from FATCA. over 50,000 keywords to track down overseas So, let’s not allow the global taxmen to estates of deceased people to garner inheritance knock on our doors and let’s be straight and tax; in fact the UK inland revenue department honest about what we are doing, as well. If have proudly boasted that this computer system it’s good enough for the goose, it’s good for has to date raised over 35M British pounds from the gander. previously unfound inheritance tax payments, If you get stuck, speak to Global Fiduciary yet gain fines were levied in some cases, as well. Solutions Limited or visit www.iglobalwillsregistry. Keep reading, guys and girls, it does get com, as they are both from the same group of better. I promise. companies and, hey, I just remembered that they The US and, to be fair, just about all tax both sponsor Hong Kong corporate pensions gathering countries, have introduced Foreign with overseas investment that attract no taxes, Accounts Tax Compliance Agreements (FATCA), even UK property. which is the same as what happened to the BVI, in all but the way it has been introduced. FATCA is agreement not to tax each other’s pensions… where one country will openly disclose a person’s Yes, it’s true. The deal was struck so that if, tax information to the other; what ever happened say Royal Dutch Shell pensions for example, to privacy laws? invested 50M euros in US Treasury bonds or property development in London or even The Good News France, then the deal is that the pension will In May of 2013, the G20 had a group not be taxed when it sells these holdings (for meeting (an expensive one at that, paid for by huge profits). your hard earned cash). This meeting was to In 2012, France was ordered by the encourage big international corporate pensions European Courts of Justice to repay taxes - so to invest in cross border property development far 10B euros, to foreign corporate pensions and government bonds/gilts (I wonder if Greece that did in fact invest in units and real estate skipped this meeting as, let’s face it, this may be in France, where France had previously a superfluous discussion for them). taxed these pensions wrongly. Oooh la la, Why did the G20 spend so much money the intergovernmental agreement must have encouraging such investment from foreign slipped their mind. corporate pensions? Well, I shall let you in on What does this mean to us, the normal a little known secret: these countries have an people, working hard to build our financial security? Guess what? I have an idea: lets all set up corporate pensions and be exempt from taxes on foreign investment and cross border FATCA meddling… Actually, folks, that’s not so far from reality. The answer may be even simpler than that. Perhaps ask your employer if they have a corporate pension scheme that you can invest more money into and then freely invest (this is normal in some countries), such as in the UK (“SSA pensions”, as they are called). “SSA” means “small self administered”, so you can have a company that takes out a self administered corporate pension depending on where that pension trust is domiciled, such as Hong Kong for example, where there are insider business 4 www.myanmarinsider.com Doing Business in Myanmar By Jack Sheehan and William Greenlee, Partners at DFDL

yanmar is a highly promising land foreign banks the opportunity to participate in It is expected that the MIC will soon publish years after completing construction of the for businesses and investors, which Myanmar’s banking industry. The opening up of new procedural regulations that will be helpful to business. continues to experience rapid Myanmar’s banking sector towards foreign banks further understanding the methodology used by Meconomic growth. In 2013, the gross domestic would be a significant evolution, as foreign banks the MIC when scrutinising investment proposals. For projects qualifying for an investment permit product (GDP) was estimated to be US$884 per are currently restricted to setting up representative Whilst some uncertainties surrounding the practical from the MIC, the above mentioned benefits can capita, which is 6 percent more than the estimates offices only.2 implementation of these changes still remain, it be substantial. The current corporate income tax provided for 2012 and 2011. As of June 30, In addition to establishing the framework for cannot be denied that the FIL has been favourably rate in Myanmar is 25 percent, and thus the five 2013, foreign investments in Myanmar totalled a proper stock exchange, the Securities Exchange received by foreign observers and a large part of the year corporate income tax exemption alone can be more than US$42B, with the largest investments Law established the Securities and Exchange international investment community. justified in a cost benefit analysis to apply for an coming in the power, oil and gas, mining and Commission, which is the main regulatory body investment permit with the MIC. Additionally, manufacturing sectors. Nestled between markets and will supervise the securities market, set out the Foreign Investment and imports into Myanmar are generally subject to both of over two and a half billion persons and boasting licenses available for securities businesses (dealing, Restrictions customs duties and commercial tax. Customs duty a population of over 60 million (of which 46 brokerage, underwriting, investment advisory According to the FIL, when an investment rates vary from item to item. However, commercial million are of working age), Myanmar, flush with and company’s representative), provide for the proposal is made with regards to a business, project, tax is fixed at five percent, except for a few specially natural resources and a large work force, is in a establishment of an over the counter market, set out sector, or an asset has been specially designated by designated items that carry a higher rate. Therefore, prime position to experience dynamic economic the prohibited acts in relation to securities trading notification, the investment may be carried out exemption from taxes on imports into Myanmar growth in the years to come. (e.g. insider trading) and the relevant penalties, under any of the following corporate forms: can be very beneficial to investors. The Myanmar Parliament is actively working to and provide for the establishment of a securities The above points are the main tax incentives develop a modern legal and regulatory environment depository and clearing business. The next step is a) A 100 percent foreign owned company under the FIL that investors are regularly that will further encourage foreign direct investment for the government to publish the associated rules, b) A joint venture company formed by a foreigner concerned about. There is a list of further (FDI). The recent flurry of new laws that are which will provide further details on the Security and a Myanmar citizen, or government discretionary incentives that investors can apply being drafted and enacted have given investors Exchange Law. With this first step toward developing department or organisation, or for with the MIC. a clearer picture of their rights and obligations a capital market in Myanmar, further progress c) A public/private partnership, including a BOT when investing, as well as the direction in which must be made, including updating the Myanmar contract or other analog system Challenges of Doing Business in the country is heading. company law legislation (which we understand is Myanmar As a prime example, we can highlight the underway) and establishing a robust regulatory Alternatively, a foreign entity may establish a While the foregoing has sought to highlight following three important changes: Myanmar’s and reporting framework, which will be able to branch office in Myanmar, which will be capable some of the important changes happening to accession to the New York Convention on the withstand the scrutiny of domestic and international of engaging in revenue generating activities, as long Myanmar’s investment climate, a cautionary Recognition and Enforcement of Foreign Arbitral investors. Nevertheless, the Securities Exchange Law as those are permitted under the memorandum approach to investment in Myanmar is still Awards, 1958 (“New York Convention”); the is another step forward towards the modernisation and articles of association of the parent company. recommended. recent enactment of the Central Bank of Myanmar of Myanmar. Generally, as a branch is not specifically designated Both the European Union and Australia Law, 2013 (“Central Bank Law”), which provides Of course, Myanmar still has some way to go, as a permissible corporate form for investment under have lifted their economic sanctions imposed on independence to the Central Bank of Myanmar but no one can doubt that progress is being made the FIL, branch offices are registered by foreign Myanmar and the United States have eased theirs. from the Ministry of Finance and Revenue; and and that there appears to be is a strong political will firms that are engaged in investment activities that It is still advisable for investors to identify any the Securities Exchange Law, 2013 (“Securities to continue with the reforms in both the economic do not require a permit from the MIC. potential issues that could arise by referring first to Exchange Law”), which provides the framework and political arenas. Certain activities have by notification been the Specially Designated Nationals List (published for the establishment of a stock exchange. 1 expressly prohibited to foreign investment, including by the US Department of the Treasury) before On July 15, 2013, Myanmar became the 149th Foreign Investment Law, 2012 those that are potentially detrimental to public doing business with any Myanmar national or contracting state to the New York Convention. This On November 2nd, 2012, the new Foreign health or the environment, could be prejudicial to Myanmar company. is a significant economic and legal step forward. Investment Law (“FIL”) was enacted; designed to the culture of the country, as well as certain services Another challenge facing investors is that Once the government adopts domestic legislation jumpstart the development of wealth, infrastructure and/or manufacturing activities that are related to Myanmar’s institutions are neither savvy nor well implementing the convention, Myanmar courts and productivity in Myanmar. agriculture, livestock and fisheries activities. Yet, even experienced in the content or implementation will be obliged to give effect to foreign arbitration The new FIL and the implementing rules and in these sectors foreign investment will be allowed of Myanmar’s laws and regulations. Investors clauses and to enforce arbitral awards made in regulations issued thereunder provide increased with prior permission of the State. will often face civil servants who are either other member states. Foreign investors, as between areas where foreign investment is allowed, greater inexperienced or unclear on what needs to themselves, will be able to choose a neutral offshore flexibility as to the form of the investment, Tax Incentive under Foreign be done. Myanmar’s institutions, and the in advance for the resolution of any disputes that including less rigid rules regarding joint ventures, Investment Law persons staffing them, are learning as they go, may arise. enhanced tax and investment incentives, logical Projects that gain approval by the MIC under so an investor must be determined in order to With the passage of the new Central Bank solutions for the settlement of disputes, as well the FIL can apply for tax incentives. A key tax successfully navigate this sometimes frustrating Law, the Central Bank of Myanmar will become as a strengthening of the legal framework for the incentive available to foreign investors is a five year regulatory environment. an autonomous body, acting more independently use of land, employment related matters and the holiday from corporate income tax. The five year Myanmar also faces challenges with regard to from the Ministry of Finance. This relaxation in remittance of foreign currency. period commences at the beginning of commercial the next general election in 2015. The newly elected regulation and control seems to indicate the opening The Myanmar Investment Commission operations. In addition, investors may apply for government must continue on the current path up of the banking industry to more international (“MIC”) is the regulatory authority empowered designated discretionary benefits, including the of reform despite the hurdles it will face. Among participation and the rules and regulations issued under the FIL, with broad discretionary powers following: the greatest challenges will be a young banking under the repealed Central Bank of Myanmar to implement the objectives of the FIL, including system, a developing network of infrastructures Law still remain in force for the time being. The approving foreign investment projects and dictating a) The right to pay income tax on the income of and a generally weak educational system. Myanmar government has indicated that new rules the terms and conditions under which such projects foreigners at the rates applicable to the citizens Despite the challenges, there are many and regulations are forthcoming and may provide can be carried out. residing in Myanmar. opportunities for foreign investors in Myanmar b) Exemption/relief from customs duty or in fast moving consumable goods, real estate, (1 While Myanmar already has a small stock exchange in operation with two listed securities, the lack of a other internal taxes (or both) on machinery, transportation and chemical related activities, to comprehensive regulatory framework has prevented its development. The Myanmar government appears equipment, instruments, machinery name just a few, and all of them are significantly to be determined to rectify the previous shortcomings with the enactment of this new law.) components, spare parts and materials used encouraged and rewarded. Of course, with the in the business that are imported, as they are further economic opening of the country, there will (2 Deputy Finance Minister Maung Maung Thien mentioned that these rules and regulations may allow actually required for use during the period of be other opportunities across the board in many foreign banks to operate in Myanmar through joint ventures. In February of 2013, President Thein also construction of the business. other sectors. For instance, the current restrictive announced that foreign banks may be permitted to enter Myanmar with majority owned joint ventures c) Exemption/relief from customs duty or other regulatory framework related to insurance, banking, with local banks. These joint ventures would then eventually be followed by wholly owned subsidiaries internal taxes (or both) on raw materials vocational training and retailing activities is expected and then full branches. However, the regulatory and licensing structure for foreign banks remains unclear.) imported for production for the first three to change soon, either by or before 2015. insider investing 5 www.myanmarinsider.com Investing in Rubies By Naw Thee Zun

ubies are unquestionably the most sought an AGL rating of “excellent”. “Cut” represents Hue Transparency Tone after of all the precious gemstones in the the symmetry of the stone’s shape, the weight Pigeon Blood Red Exceptional Vivid medium dark world, and amongst the most expensive. of the final cut stone and the brilliance of the RThere are only a few countries in the world that finish. Investment grade rubies with an excellent produce rubies, with Myanmar being the industry cut offer the best mix between the smoothest Cut leader, generating over 80 percent of the world’s finish, the heaviest weight and shape’s precision. Carat Weight Finely proportioned supply of these precious stones. 23.1 Looking back at history, you will see that • Brilliance - Compare brilliance and look for gold and silver coins and a variety of precious a minimum rating of 95 percent. “Brilliance” gemstones have long been used as an established represents the precision of the cut, so that means of bartering for goods and services. Today, the maximum amount of light reflects back natural, unenhanced rubies are among the rarest to the eye. Stones with lower than 50 or 70 and most valuable of all gemstones. percent brilliance lose light through the sides As an investment, precious gemstones and of the stone due to imperfections of the stone’s diamonds are considered to be an investment angles. in a hard asset, just as gold and silver are. Today, in many parts of the world, investments in hard • Weight - Compare weights and look for a assets like land, gold and gemstones are preferred minimum of one carat. “Carat” represents the over stocks, bonds, currency and other soft assets. weight of the stone derived from an ancient Because the value of gems has shown to measures and weights system. When it comes increase at a rate equal to inflation, investors to investment quality rubies, heavy stones hold should also expect to hold the stones for 10 years value more consistently than lighter stones. or more to see a sizable return on their investment. Furthermore, investors who collect with a purpose • Certification - Examine the certification agency will not only add value to a gemstone investment, and look for a score certified by the AGL. The but also greatly enhance their collection’s intrigue AGL has standardised international guidelines - especially among other collectors and investors. to describe stone quality. Stones graded without The Carmen Lucia Burmese Ruby Star Rubies are even rarer than the average a standardised grading certificate might have ruby stone. It is estimated that only one out of every undisclosed flaws or might not match third one hundred rubies produced becomes what we party grading systems. know as an elusive “Star Ruby”. These incredible gemstones exhibit a distinct six-ray star that moves Buy Right across the surface of the stone when the stone is The natural beauty and rarity of gemstones moved to reflect a light source. This brilliance has inspired humanity to use them for personal represents the precision of the cut, which allows adornment for as long as history remembers. the maximum amount of light to be reflected Some gemstones, such as rubies, can be priced back to the eye. Stones with lower than 50 to 70 higher than diamonds, as their scarcity endows percent brilliance lose light through the sides of them with a greater market value. The value of the stone due to imperfections of the stone’s angles. high quality rubies has appreciated tremendously All things considered, it is no wonder these in recent years, as known sources are almost magnificent gemstones are in high demand depleted. Owning gemstones not only provides amongst many private investors. If you’re looking a source of beauty and admiration, but it can to invest in a ruby and own one of the rarest of also prove to be a sound investment when rare gems, a ruby with an excellent cut will offer done right. Anyone can profit from investing the best mix between the smoothest finish, the in gemstones, as long as you have a strategy heaviest weight and the shape’s precision. When that works for you. it comes to high quality rubies, heavy stones hold value more consistently than lighter stones. Basic tips that you need to know if you are seeking out gems as an investment include: What to Look For • Learn as much as possible about the • Clarity - Compare clarity according the American gemstones - Mistakes made in such an investment Gemological Laboratory (AGL) clarity guide and can be very expensive. For instance, with so many look for a Free of Inclusion (FI) rating. “Clarity” treatments available today, it is imperative that represents the internal perfection of the stone, you know the details of any treatments done to and because investment quality rubies require the your gemstone collection. highest clarity, you must look for flaws (internal cracks or chips) within the stone. You can see • Buy the best stones you can find… And be some flaws with the naked eye, but you might patient!!! - Gemologists from an approved need a jeweller’s loupe to view the stone at 10x laboratory must certify all purchases. or 20x magnification. • Try to buy below retail prices - Usually, gems • Tone - Compare the tone of the ruby, and look bought as an investment should be bought from for a medium tone score of 55 to 65. Too light a wholesalers, either as particular gemstones or in tone and the ruby will appear diluted and washed lots. Go to reputable dealers or wholesalers who out. Too dark and the transparency suffers. mine or cut the stones themselves. There are many of them in Myanmar - just look for the right ones. • Cut - Compare the cut of the stone and look for It takes patience, but it is certainly worthwhile. insider travel 6 www.myanmarinsider.com Big hand. Small hand. Slow Hand.

Yangon Day Trips By Anthony Parker

Mount Kyaiktiyo Shwemawdaw Pagoda Bao

Working in the city everyday can take its toll population has now moved on and has been on our sanity. I try to get away for a few days replaced by a large Indian contingent. every month to recharge the batteries and enjoy The town these days is very small and mostly some of the delightful places that Myanmar has revolves around an old church from the 18th to offer. Here are five of my favourites. century, as well as a central marketplace, while nearby Kyauktan is another popular spot worthy Bago of a visit. The city enjoyed its glory days in the 13th Governor’s_ House,_ Pyin _Oo _Lwin century when Kubilai Khan’s Mongol forces Mount Kyaiktiyo (Golden Rock) destroyed Bagan, forcing King Warau to move Leave Yangon early in the morning, climb the seat of his Mon Empire to Bago. The city was Bulls plough the abundant farmland around industry. Pots are worked by hand as an assistant aboard a bus from the bottom of the mountain annexed by the Taungoos in 1539 but continued the town and houses are not much more than manually turns the potter’s wheel. Once the pots that traverses the winding roads to the top, and to flourish as a busy river port before the river basic wooden huts on stilts. Outside, the owners have been painted and dried, they are baked for five rush back down to catch the first bus back, and changed its course in the 18th century, leaving sit lazily, watching the day go by and puffing on days. They are then transported to the surrounding Mount Kyaiktiyo - one of the country’s most Bago to become the mid sized regional town it their cheroots. Irrawaddy region for sale, where they are generally pious sites - is possible as a day trip. However, continues to operate as today. It’s a beautiful, calm spot to really get to well received thanks to the reputation Twante’s if a little more time is available, it’s a more Hardly surprisingly for a city so steeped grips with the country without venturing too pottery industry has built for itself. comfortable trip over two days. in Buddhist history, Bago is renowned for its far from Yangon. The most popular pottery shed is Oh Bo Kinpun is the mountain’s ground zero. It’s abundance of temples and pagodas and has been The operators of the Dallah Ferry, which (most rickshaw drivers in the town will have a pleasant, basic town, accessible in less than described by visitors as a “Buddhist Disneyland”. leaves from Yangon’s Pansodan jetty, have heard of it), and another popular site is the four hours from Yangon. A few local restaurants Its most famous pagoda is Shwemawdaw, (unfortunately) recognised the town’s popularity Shwesandaw Pagoda. here and there and the one road filled on each standing 46 feet higher than the more famous among tourists - hiking foreigner prices five fold British writer George Orwell also spent side with shops selling the usual tourist trinkets, Shwedagon in Yangon and said to be the tallest in the last few years - but still it doesn’t attract some time living in the town and the old Police but aside from that, there aren’t many reasons to pagoda in the world. It has been rebuilt several too many tourists, and the ten-minute ferry trip Commissioner’s house in the town is thought stick around. There are a few basic but reasonable times over the years and apparently contains two offers a fascinating, if brief, glimpse at river travel to be where he lived during his brief stay there. accommodation options in town for those who hairs and two teeth of the Buddha. in the country. want to spend the night. Other places worthy of a visit are the Hintha In Dallah itself, the most popular ways of Thanlyin Some choose to travel to the top by bus Gon Pagoda, the reclining Shwethalyaung Buddha travelling around are either by bicycle or trishaw, Despite being an important town during the but, again, those with time on their hands are and Kanbawzathadi Palace, a reconstruction and there are a number of placid pagodas, but British Empire, Thanlyin (named Syriam by the advised to walk. of the palace built by 16th century ruler King the town’s highlight is the simple lifestyle offered British) was actually founded by a Portuguese It’s challenging but not too strenuous, and Bayinnaung. in comparison to the relative chaos on the other adventurer by the name of Filipe DeBrito. can usually be done in about five hours. The Bago can be reached in less than two hours side of the river. DeBrito served under the King of Arakan, path is well maintained and you will be greeted from Yangon’s Aung Mingalar Bus Station. becoming the governor of Thanlyin in 1599, but by the friendly smiles of the local people as Twante in 1613, his empire was ransacked by the Burmese you ascend. Dallah Twante sits on the scenic canal by the same and DeBrito’s reign came to a humiliating end Up top, as the Golden Rock is a popular As Yangon sprouts shiny, modern name, and it is through this waterway that boats as he was impaled on a spike for desecrating pilgrim site for Buddhists, it is particularly condominiums and imports the latest Japanese travel from Yangon. Buddhist shrines. busy, but it’s worth spending a bit of time to cars, across the river in Dallah, life continues Once renowned for its art, today Twante attracts During World War II, Thanlyin was used take in the beautiful views that stretch across much as it did hundreds of years ago. visitors interested in the city’s burgeoning pottery by foreign - mostly timber - merchants, but that the dense Mon forestry. Insider luxury 7 www.myanmarinsider.com Big hand. Small hand. Slow Hand.

By Wes L. Byron

uper rockstar Eric Clapton has always had a passion for music; and the same can be said about his collection of Sluxury watches. In 2003, Christie’s auctioneers in New York put up for sale 23 of Mr. Clapton’s Rolex watches. From the collection, 16 watches were chronographs, which are said to be his favourite watches of all time. His eye for class and distinction, as well as a shrewd knowledge of the market, saw a stainless steel Rolex Oyster Cosmograph, known as an “Albino” (the four dials are all the same silvery colour) was sold for $50,200. However, had he held on to it, five years later the same watch sold for $505,000, although this might have had something to do with the fact Eric “Slow Hand” Clapton that it was previously owned by the rock god. Another in the collection, the one that he was wearing when he first played the super hit Layla, is a 1965 stainless steel Rolex Yacht Master, which fetched a whopping $125,000 under the auctioneers hammer (the watch is fine, that’s just a phrase). His penchant for chronographs extends to the Patek Philippe luxury brand. The top seller at the auction was his extremely rare 1950 pink gold chronograph that went for $175,000. His bug for collecting fine watches has become well known amongst the high society elite and when Christie’s in Geneva sold his platinum perpetual calendar chronograph watch with moon phases in 2012, Patek Philippe had already decided to cease production of this model, making it a very rare and very precious collector’s item. Two other watches from this run are now cased in platinum. One is on display at the Patek Philippe Museum, while the other was reportedly sold for an undisclosed sum in a private transaction in 1989. Mr. Clapton then purchased this watch sometime in the late 1990s, again, for an undisclosed amount. The same watch was sold at auction in 2012 for over $3,625M - showing that, as Rolex Oyster Cosmograph with his music, timing is what it’s all about.

a black dial, an elegant brown crocodile leather often carry many products on a single line, meaning Tell Time with Class and Flair strap and a five figure price tag, the Navitimer is that a brand may offer a range of both high end sure to turn heads. and mid range luxury watches. High end luxury By Mae Anacay Again, the first thing to consider when buying watches showcase exclusive design and astonishing luxury watches is that you are making an investment. craftsmanship, considering that the majority, if Figure out if you want to invest in a specific but not all, of the watch’s components are handmade. hink of luxury watches in terms of unique watch, or if you want a classic watch that High end luxury watches are also produced in automobiles: You have the high end you can wear everyday. smaller quantities, thus making each piece extremely T(Maybach) brands, the mid range valuable in its own right. Such items are available (Cadillac) brands, and the “basic luxury” (Volvo) Water Resistance only at specialised watch dealers and jewellery stores brands. Although any of them could cost you a Given that luxury watches come with expensive and prices start at around $5,000 for stainless steel small fortune, some are more exclusive and more tags, it only makes sense to purchase one that will watches and can reach into the millions for other highly coveted than the others. Yet, aside from their When choosing watches, most men value last. That being said, make sure you invest in a watch types. Mid range watches are the “stereotype” of hefty price tags, these brands have something else brand performance (as each brand has a distinctive that is at least 50m water resistant. This means that luxury; durable, beautiful watches that are both in common: Owning a luxury car, no matter how advantage in terms of consumer loyalty over its you can use it while swimming in shallow water elegant and valuable. Mid range luxury watches expensive or how exclusive it is, is an investment, competitors, but we’ll get to that in a bit), build or bathing. If you need a watch for snorkelling or are found at watch dealers and jewellers. Stainless as it is with a luxury watch. quality, features and the watch’s exclusivity, regardless other similar water activities, try a watch with 100m steel models start at around $1,000 and the most Whether you’re in the market to start your of the price. On the other hand, most women prefer resistance. Finally, get a diver’s watch that is at least expensive of the gold on gold variants could reach own collection or to purchase a gift for someone exclusive brands and beautiful, intricately designed 150m water resistant if you’re into scuba diving. as much as $20,000. Luxury watches, on the other else, here are a few things to remember when and crafted watches, such as those embedded with When it comes to diver’s watch, the IWC hand, are sold in department stores and malls. While shopping for time. rare gemstones or those with gold and antique Aquatimer Chronograph Blue is always a popular their prices may be a bit more expensive when finishes. choice. With a blue dial that provides maximum compared to “normal” watches, this range of watches Style If you’re purchasing a gift for your special lady, legibility, even on night dives, it complements every is still at the lower end of the luxury spectrum. The unspoken rule about luxury watches is consider the Cartier La Dona watch; a beautiful frequent diver’s ensemble. Nevertheless, luxury watches are elegant, stylish that if it doesn’t go well with your suit, then you and elegant timepiece with a diamond bezeled and trendy. A stainless steel model could go for as cannot consider it a “luxury”. Of course, this case and bracelet set in 18k white gold with an Brand Name low as $500, while a gold on gold bracelet variant rule is moot if you’re purchasing a sports watch. elegant, polished finish. Given the fact that this six In the same way a car enthusiast would know could sell for as much as $4,000. A watch’s brand, Despite this, consider a watch’s versatility before figure watch has already been discontinued, giving the value of your car, watch aficionados will be able however, is only as impressive as its appearance. If purchasing. Determine if it’s an everyday watch, one to your lady love would surely earn you some to spot a watch’s exclusivity and rareness from afar. you neglect to properly maintain your luxury watch, for more formal evening gatherings or for sporting brownie points. That being said, the brand plays a pivotal role in then it could appear as ordinary as the ones you events. For this reason, a classic watch is always a For men, the Breitling Navitimer combines determining a watch’s desirability. will see on the street. wise choice for those who are just beginning to the appeal of aeronautics and the beauty of a Before we begin discussing different brands, With these guidelines in mind, you are well build their collections. chronograph. With a rose 18k gold finish set on it would be worth pointing out that such brands on your way to purchasing a fine luxury watch. Insider Professional 8 www.myanmarinsider.com Moe Kyaw’s Journey

The tale of how winning a competition in 1997 led to a trip to Manila and a career in accountancy. The Managing Partner of Win Thin & Associates tells the Myanmar Insider of his journey to the top of his profession and his view on the tremendous opportunities ahead.

Name: Moe Kyaw Job Title: Managing Partner Win Thin & Associates (Associate Firm of Pricewaterhouse Coopers) Age: 45 MI: How did you begin your career in Myanmar? How did you arrive at the position you are in today? MK: I completed my Bachelor of Commerce degree from Yangon Institute of Economics in 1993. Thereafter I was admitted into the CPA programme. The Myanmar CPA programme is such that you do your bonded training while working for an audit firm. That’s how I became involved as a trainee with Win Thin and Associates (WTA), working from 9am to 5pm, after attending classes from 7am to 9am. After completion of my training, I joined the I believe, as auditors, we want to avoid same firm as a junior auditor. It was at that time conflicts of interests as much as possible. that Myanmar’s former military government tried to open up the country. A few investors As such, I do not want to deviate much came and one of them was SGV Manila. SGV from the audit and assurance fields. I also avoided was a member firm of Arthur Andersen at that making investments into private companies. I time. They decided to appoint WTA as their have spent more and more time on consulting sole Myanmar representative and eventually we WIN THIN & ASSOCIATES also formed SGV Win Thin Consulting Ltd CERTIFIED PUBLIC ACCOUNTANTS and advisory services from 2011 onwards, due to in Myanmar, headed by a manager from the the significant increase in foreign client Philippines. Our objective was for them to assist numbers after Myanmar opened up in the development of audit methodology for numbers after Myanmar opened up. We signed our firm. With the tie up, staff were given the a Memorandum of Understanding (MOU) with opportunity to be sent to Manila for a month PwC (Pricewaterhouse Coopers) in November signed at ASEAN level. For the advisory side, preparing on many fronts to keep our staff; it’s not for training. There was a competition via a test, 2012 and became the local affiliate of one of the the tie up with PwC allowed us to hone our just about money, but management, continuing and I scored first. I was sent to Manila in 1997. Big 4. I provided tax and market entry advice for expertise further through interaction with more education and foreign training that we provide for That was my first ever foreign trip, as well as my PwC clients. As part of my contribution back international clientele. Having said that, we really our staff. We have regular staff parties and outings first ever experience taking an airplane. After I towards the development of the profession in need to improve on our audit methodologies and that we sponsor. And last but not least, I believe came back, I became an audit supervisor and, Myanmar, I give lectures on the CPA programme standards to be on par with international levels so we pay our staff the highest allowances, bonuses one year later, was promoted to audit manager. on practical auditing. I am also a central executive that we can increase our audit fee in line with the among the CPA firms in Myanmar. By 2001, Arthur Andersen collapsed due to the committee member of the MICPA (Myanmar fee these international firms are charging. MI: From a business perspective, what do you feel Enron scandal and our SGV joint venture was Institute of Certified Public Accountants) and MI: With the benefit of hindsight, would you are the biggest challenges facing you in the next also dissolved. We formed a new consulting a secretary of the CGA (Commerce Graduates have done anything differently when you started, one to three years? entity independent of our audit outfit, named Association). and if so, why? MK: Capacity, skills and knowledge. We will Win Consulting Ltd. In 2003, in an amazing MI: Do you see any of your firms having to MK: Both my parents are Karenies [one of definitely face increased competition locally gesture, our founder and chairman U Win Thin change or adapt to Myanmar’s new trends and its Myanmar’s major ethnic groups]; my father is a and from abroad. In addition, right now, most decided to distribute shares in WTA to all fully opening up to international markets? civil servant and my mother is a housewife. As professional services firms are small and dispersed. fledged CPAs working within the firm. We have MK: With humility, I would like to point out Karenies, we are typically contented people. If I We will need to look at mergers and acquisitions; to take note here that, in Myanmar, auditing that WTA is supposed to be the largest local had started in other lines, or if I had switched to to become sizeable to compete with foreign firms services are allowed to be carried out by the firm accounting firm in Myanmar. We are also other firms or fields, I would not have done as for business. as a corporate entity, but all the shareholders must attending as the Myanmar representative the well as I am now. MI: Hypothetically speaking, if you were entering be a CPA to render audit services. Audit reports ASEAN federation of accountants. We are the MI: How do you feel that foreign companies now into business for the first time in Myanmar, what can only be signed by a licensed Myanmar CPA. only firm with a separate in house training centre, entering into business here will affect the local are the key factors of consideration, and what It was then that I became a shareholder/partner in providing formal talks and training to staff each workforce, and do you feel that they will bring would be the typical issues that you would address WTA. In 2012, I became the managing partner week; specialists from PwC, professors and new opportunities to existing local businesses? before putting money in? of the firm. experts from the Yangon Institute of Economics MK: In Myanmar, good talent with foreign MK: I would want to have adequate knowledge MI: Do you ever think of diversifying your and the IMA Institute. Our firm also earned exposure is hard to find. Local accounting experts of laws and regulations. Also, foreign investors business interests? many invites to participate in international forms, are rare and in general not of high capabilities. typically asked for issues on money transfers MK: I believe, as auditors, we want to avoid seminars and talks relating to Myanmar. We have It is offset by the fact that Myanmar people are out of Myanmar. Since August 2012, a foreign conflicts of interests as much as possible. As to continue to walk the current path to keep up generally quick at learning. Another resource exchange management law was enacted and there such, I do not want to deviate much from our good approach. The audit field is protected would be Myanmar returnees [people of are official, secured ways to transfer money in the audit and assurance fields. I also avoided from international markets, as foreign audit Myanmar origin working overseas, now returning and out of Myanmar legally. Investors have to go making investments into private companies. I firms cannot sign off on local company audits. home]. Their numbers keep on increasing. One through the right channels for money movements have spent more and more time on consulting ASEAN members have also decided that public issue keeping them from returning would be to show investments into Myanmar. and advisory services from 2011 onwards, practice - i.e. auditing - will only be allowed to education for their children, so competition for MI: How do you see Myanmar comparing with due to the significant increase in foreign client local CPAs in accordance with an MRA to be qualified staff is very tough now. Our firm is its Asian neighbours in the short and long term Insider Professional 9 www.myanmarinsider.com future? MK: I think it’s going to be a long while before Myanmar catches up with its neighbors. Firstly, our education system suffers from the past 60 years of weak policies, lack of good governance and management. There is one current generation of the Myanmar working population whose skills and competencies are well below those of our some Asian neighbouring countries, such as Singapore, Malaysia, Indonesia. Even in Cambodia, I noted that most of the people I interacted with are now improving their English, so we should not underestimate other neighbouring countries, too. At present, the government is no doubt going in the right direction by investing in infrastructure and capacity building. These are long term projects and the effects would not be felt in the immediate future. We have to be patient. MI: If you could make one major change in the country to make it more competitive, what would it be? MK: It would be two, not just one. First, it would be changes to the educational system; I mean, not just change a bit here and there, but wholesale changes; revolutionary change by adopting a system that works internationally and putting that in Myanmar without much localisation. A good analogy would be, instead of building a house from scratch, we just get the prefabricated unit. Second, we need to get the enforcement of law and order working. We have laws, but sometimes law does not seem to apply if you are a Your finance team has what it crony of some kind. This has to change. MI: What advice would you give to someone takes to help your business grow! looking to start up a business and invest in Myanmar? MK: To do the right things and to go down the straight path. Follow the law and it will be great for your future and your reputation. Sometimes, my clients ask why others can do the wrong things and get away and they cannot do the same. My standard response would be: When others are doing the wrong things and you are doing right, you become better! See this challenge as an opportunity. Just like a Myanmar proverb, “Kyee Lan Sar Sarr”, you do not have to eat like a crow, always turning around and watching out, if you Corporate Training do the right things. Internationally recognized finance courses MI: Can you briefly explain the differences of Myanmar accounting standards versus the IFRS Short courses and seminars or IAS? MK: Prior to 2002, we did not have formal Myanmar Accounting Standards (MAS) per se, even though we have referred to British standards since independence times. In December 2002, the Myanmar Accountancy Council adopted International Accounting Standards (IAS) and International Financial Reporting Standards finance All your finance staff can now experience training by World class (IFRS) as MAS and MFRS (Myanmar Financial lecturers and tutors, without leaving Myanmar, at IMA Institute of Reporting Standards). We only adopted certain Accounting and Finance. standards, as some were not applicable to Myanmar at that point in time. In 2010, we replaced the old MAS and MFRS with new We bring many years of corporate training in ASEAN and around the IAS/IFRS in place at that point in time. All region; MNCs, global banks, regional governments and government our standards are in English. We adopted the owned organizations have confidently sent their finance staff to IMA main provisions; we have not yet prescribed a for their training needs. SIC (Standards Interpretation Committee) or IFRIC, which should be part of our standards. MI: What would be your advice to the future Finance teams of many corporate and government departments in accountants/CPAs on their roles in the modern Myanmar have already improved their skill sets with IMA. business world that Myanmar is gradually being exposed to? Now is the time for your finance team to add more value to your business! MK: Myanmar opening up will offer you tremendous opportunities in the coming year. Be prepared to grasp these opportunities, stick to Contacts: 15B Dhama Zedi Road, San Chaung • Tel. 095 133 056 / 094 200 111 84 • [email protected] your ethics, and you will be in good stead. Insider investing 10 www.myanmarinsider.com The Importance of Political Risk Assessment when Evaluating Large Investments in Myanmar

By Chris Pockette

roadly speaking, political risk can be identified as any political agenda, decision, vested interest or event that directly or Bindirectly alters the value of an economic asset. More to the point for foreign investors serious about Myanmar, political factors - some macro, some more nuanced - will constantly influence the condition and returns of their investments. This is especially prevalent with investments that are more illiquid in nature, such as the large amounts of foreign direct investment (FDI) that many are considering in Myanmar. When making large investments in markets like Myanmar, many investors will actively manage credit, operational and more tactical risks, but devote far less effort assessing the political risks. Yet, because politics often trumps economic logic, especially in emerging/frontier markets like Myanmar, uncertainties that have political impressive the results going forward, the politics that the parties to this potential dispute are serious major impact. Accordingly, the West and other underpinnings by far carry the most potential of substantial change and reform are always messy. about finding a solution. They have been talking powerful political entities will continue to play for causing the sort of negative impact that can to each other and, instead of waiting for the run important roles as Myanmar pushes towards imperil and often destroy the value of foreign Political Risk Overview of Myanmar up to the 2015 election, they are acknowledging its future. investments. Therefore, investors, considering Today and thus framing the issue now. Therefore, in order to maximise the high exposure in Myanmar, should first factor Strong Vested Interests: Initially, many Still, it is hard to envision an outcome protection of their returns, investors considering in the relevant political risks and uncertainties. commentators, especially those who remembered acceptable to most of the population other than high exposure in Myanmar must understand the the last period of partial opening in the late Aung San Suu Kyi being allowed to assume relevant political risks and uncertainties, not only Where We are Today 1990s, worried most about the possibility of the Presidency if she wins the election. Yet, it on national, regional and local levels, but also • The primary political story in Myanmar recently backsliding. Justifiably, the further Myanmar is unclear if those who currently hold the real the accompanying transnational risks. has been a genuine opening towards political reforms, the less we hear about backsliding fears. political and economic power in the country Conclusion: One of the primary risks pluralism. Myanmar can point to the fact that, Still, the underlying concern remains. As power are willing to allow this to happen - at least inherent in risk management is that when we unlike some of their more prosperous Asian increasingly becomes redistributed, there are not without a struggle. How that struggle plays detail the uncertainties as above, it starts to sound neighbours, the leader of their political opposition many entrenched, vested interests that must out will be critical to Myanmar’s future, as well like the problems are intractable and that the is sitting in their parliament occupying a seat she somehow be assuaged and incorporated into any as the stability and viability of most foreign primary take away should be “stay away”, in this soundly won via election at the ruling party’s solutions going forward. These will not be easy investments. case from Myanmar. Nothing could be further expense. No matter what happens going forward, problems to solve and how they are dealt with will Rural Reform: Vested interests and from the true intention of this article; there are this represents a stunning reversal of past practice influence the political, economic and investment Presidential politics aside, almost everyone in many substantial opportunities in Myanmar. and policy that would have been unthinkable a landscape of Myanmar for years to come. Myanmar agrees that a major goal of reform While their problems are serious and complex, few years ago. 2015 Presidential Election: There are must be to raise the living standards for all, they will most likely find solutions for many if real pressures - some healthy, some troubling especially the poor. Because around 70 percent of not most. The details behind how this conflict • The current reform process underway in - building between those currently in power the population is rural, this goal of higher living is solved or how that issue is dealt with are what Myanmar is genuine, but confusing. Genuine and the opposition as this key general election standards equates to rural reform. will profoundly influence the fortunes of many in that the President and his fellow reformers approaches. At the heart of this concern is the As we have seen in other Asian countries, foreign investments. are resolutely pushing ahead, but confusing in possibility of a constitutional showdown. The the first step on the road to rural reform is The good news is that an investor considering that the majority of initial reforms were the basic issue can be summarised as follows: often land reform. Myanmar took this step Myanmar can take steps to shield their in country result of “policy proclamation”, as opposed with the passing of a land reform act last year. assets from the worst of the volatility inherent to substantial legislative and/or regulatory • According to the current constitution, anyone The actual implementation of this law, like in such a rapidly changing/reforming country. changes. While the legislative process has with foreign family members is forbidden many other new pieces of reform legislation, The first step is a clear understanding of political started to catch up, and such landmark from running for President. The leader of the is a work in progress and not everyone is interests and incentives; factors that will form legislation as the Foreign Investment Bill has be primary opposition party, The National League happy with the outcome so far. No matter the nucleus of the core risks and uncertainties promulgated, there are still many unanswered for Democracy (NLD), Aung San Suu Kyi, what else goes right for Myanmar, if rural faced by foreign investments for years to come questions surrounding what type of regulatory who is both the widow of a British national reform falters or fails, many of the country’s in Myanmar. Such an understanding, when framework will be assembled around the new and who has two British born sons, is thus accomplishments will be imperiled, along with combined with a risk/uncertainty mitigation laws. disqualified from running for President. its future. Obviously, such an outcome would strategy, is what will spell the difference between also carry very negative connotations for any success and failure for many foreign investors • This uncertainty is heightened because there are • The constitution can be amended, but that foreign investments, as well. in Myanmar. There are professionals who at least four complex, interwoven processes going would require a vote of at least 75 percent Regional and Geopolitical Risks: In can help you understand and manage these on at the same time: political reform; economic of the Legislature. Currently, 25 percent of addition to the increasingly complex politics of complex political risks and uncertainties and reform; rapprochement with multiple ethnic the Legislative seats are reserved for sitting Myanmar, the influence, decisions and policies of the potential investor should consider this type minorities; and a general reordering of society. members of the military. Politicians who either neighbouring countries must also be considered. of risk management expertise as important as support the military and/or status quo occupy While all countries have neighbours, not many getting a handle on other types of risk, such as Stability of the Current Government a high percentage of the other seats. (Despite occupy a position similar to Myanmar; literally at partnership risk, etc., before committing. In its present form, the current government their popularity, the NLD currently hold the crossroads of Southeast Asia, sitting between The author, Chris Pockette, is the President is relatively stable. While big changes will be around just six percent of the Legislative seats.) two of the world’s great rising powers - China of Tabor Global (www.taborglobalcom), a highly expected to continue, for now, powerful vested and India. specialised firm that provides clients with tailored interests, as well as the opposition, continue There has been notable progress on this issue In addition, in a globalised world, political risk and uncertainty solutions key to investment to support the government. No matter how in the last year. Specifically, there have been signs decisions taken a world away can and do have a success in frontier markets. Insider Expat 11 www.myanmarinsider.com The Importance of Political Risk Assessment when A Belief in Myanmar’s future Oliver Belfitt-Nash Bio Evaluating Large Investments in Myanmar Q&A with Oliver Belfitt-Nash - Myanmar Representative, RONOC

How a young man’s journey from York University in England, to Ulaanbaatar, Mongolia, brought him to Yangon to set up operations in the financial services sector.

MI: What is RONOC’s current role in Myanmar? OBN: We focus on financial services and our major project currently is with a bank in Mongolia, where we have established relationships, invested capital and grown with the bank, and that’s the sort of situation we want to establish here. Given the current stage of the market here and the

range of opportunities on offer, we are interested Yangon, Myanmar in looking at any investment and advisory opportunities in the country. We have no projects on the go currently [in Myanmar], but are Being on the ground has been a huge help and potential. Practically the whole country can gain researching the situation on the ground, but come does give an advantage. In the nine months that I access to a mobile phone within the next five the New Year we’ll be looking to invest some have been in the country I, of course, understand years - but what if the power is not consistent? capital and get involved with projects. Financial things a lot better than I did when I first arrived. What if people cannot charge their phone and services are an incredibly appealing sector right But access to information is improving slowly. people cannot remain connected all the time? now and it will be interesting to see if that changes Let’s say, you’re sitting in a Goldman Sachs office For me, it’s education that is really important. over the next few months; as to whether the doors in New York and 10 months ago you looked at If you don’t have a population that can utilise will open completely and foreign banks can come information on Myanmar and the information these new IT products effectively, then yes, you in, set up local branches and cooperate with local available would have been minimal- but look now might be able to leapfrog here and there, but it liver established the Ronoc companies. and there are certainly more data points. Look at has to be backed up. Education takes time, often Myanmar office in January this magazine for example [Myanmar Insider], that’s an entire generation, to catch up. O2013, and has been representing MI: What is the current situation for foreign an example of more information. Our newswire the firm’s partners and investors by sourcing investors looking to move into the Myanmar is also more informed these days, and all of these MI: What do you see as being the key investment and advisory opportunities market? things add to people’s access to information. An industries here as the country develops? from Yangon, as well as providing regular OBN: I think in terms of investment in general, important thing to consider is that the nature of OBN: For me, financial services offer huge updates on the market to a larger network most people are waiting until 2015 [when this country is that it’s still very much relationship- potential. A few years ago, Asian Development of interested parties. Ronoc is an emerging national elections will be held]. The test in 2015 based. You cannot just call up, for example, the Bank published a report saying that Myanmar was markets-focused group primarily focused is stability - whoever wins. Will there be protests Central Bank and get the latest figures. You need the least banked country in Southeast Asia, with on the financial services sector, established in the street? If Aung San Suu Kyi’s party [The to know the people, you need to sit down with regards to things like the number of citizens with in 2007 by an experienced frontier markets National League for Democracy] wins, maybe those people and gather the information through bank accounts and the taxes. But you look around banker and Irish national, Michael there won’t be protests, but there might be a them through building relationships. Even if there and there are hundreds, thousands of businesses Madden. backlash from the government or the military was one ministry that regularly updated all of its that probably aren’t registered, that probably aren’t Oliver graduated from the University and there is a risk that there could be instability data, you could still only go back to 2011, maybe paying tax and, from our point of view, financial of York, UK, before moving to Ulaanbaatar, on a political level. In Myanmar, political risk is 2010, but most investors, they don’t want two services are a way that companies can improve Mongolia, where he spent three years as a country risk and I think a number of investors years of data to make a decision, they need three, their operations and impact their community. head of research for Monet Capital, a local are waiting until that time to measure if it has four, sometimes five years of data. There might be businesses in certain industries investment bank and brokerage house an impact. that want to borrow money, but at this moment advising inbound investors on Mongolia- MI: Myanmar’s rumour mill is famously in time, their only option is extortionate fees related equities and economic/political MI: Are those companies that are moving into strong. Does that contribute to the problem of from loan sharks, or banks that might not want risk. At the end of 2012 he moved to Myanmar currently taking a gamble? gaining access to information? to lend to people that they don’t know personally. Myanmar to establish the in country OBN: To a degree, yes. Anyone who comes in OBN: It does, but again, that shows the So, in that sense, there’s a huge market for new Ronoc Investment and Advisory office. the next few years is certainly taking a gamble, importance of building relationships with people lenders and new banks to come in and provide particularly if you compare this to somewhere you know really know what they’re doing. It sort capital for these clients. There are hundreds of like the USA. The safest investment is in the of works like a pyramid: The smaller players are thousands of companies across the country who USA, but you might not get much return on collecting information and, over time, a few more can benefit from borrowing money, expand their your investment there. People look at about 0.5 major players might move in, and then we’ll see business and pay back the loan. “DID YOU KNOW THAT percent there, compared with about 20 to 25 examples of larger companies investing capital. Oliver used to live percent here. Risks for investors that are already Let’s look at Coca-Cola, who are operating their here or looking to move in quickly involve the bottle factory here: If everything goes well and in mongolia?” political situation, corporate risk, communication they can show transparently what they’ve been between investors and local companies, and that doing, then other companies will be encouraged risk is very high. But the job for people like myself to follow them. is to look at the situation and find partners who have good investment potential. MI: There has been much talk recently of Myanmar leapfrogging neighbouring MI: How have investor’s views of the country countries, such as Thailand and Vietnam. Do as a place to do business changed over the last you think that is a possibility? year or so? OBN: There are some industries that can leapfrog OBN: Well, I think things have certainly developed. other countries, but everything needs to be One major thing that is lacking here is access to linked. You can bring in advanced payment information, and the more information and the systems to use, but if the staff aren’t educated more data points that people can use will help and trained to use them, then they’re not going people’s understanding of doing business here. to be effective. Look at telecoms: that has huge Insider Business 12 www.myanmarinsider.com Empowering the Future of Myanmar’s Women compete with international players. We directly benefited from the government opening up the country; the market demand for our products and services has increased tremendously and our sales have also grown significantly for the past two years. MI: With the benefit of hindsight, would you have done anything differently when you started your first business, and if so, why? DHW: Business wise, I would not have done anything differently. From a personal perspective, I wish I had taken up further studies that would help me run my businesses more effectively. Both my parents are farmers from the Irrawaddy Division and I was the first ever to graduate from our village. I was therefore content with a basic degree at that time. MI: How do you feel that foreign companies now entering into business here will affect the local workforce, and do you feel that they will bring new opportunities to existing local businesses? DHW: Yes, entry by international players has pushed up salaries and demand for skilled personnel. Myanmar is already facing a skill shortage, even prior to their entries. At the same time, most of the businesswomen at the MWEA had the foresight to see this coming a couple of years ago. As such, we have discussed he construction industry has always development from 1990 and 1995 and I stop service in the construction industry, from and implemented various methods to keep our been looked upon as the domain of managed to develop many properties as I earned piling concrete to construction. If you had lived skilled staff. For myself, my companies set aside the male of the species. This month, the trust of more and more people. The business in Myanmar during the past 20 years, you would ten percent of yearly profits for our staff. We also Tthe Myanmar Insider interviews the dynamic continues today and still bear the original name also have learned how to take opportunities as provide housing benefits, which staff appreciate, Daw Hla Waddy, who took charge of a family “Depawaddy”. In terms of changes to the they come along. Government policies at that as rentals are high and space is a premium in building project and developed it into a major business model, the ratio of split between land time were haphazard; I called it “elephant ear Yangon. In addition, we also paid volume based construction business. owner and builder has changed somewhat; in government economic policies” - opening and bonuses depending on our factory production the 90s, it was 60:40 in favour of the contractor shutting certain things at regular intervals. volume. All in all, it’s both good and bad for Name: Daw Hla Waddy builder. Nowadays it is more like 50:50. MI: Do you see any of your main business local businesses; some who have the capacity Age: 65 MI: What made you decide to diversify your interests having to change or adapt to Myanmar’s to serve or tie up with foreigners would benefit, Main Companies: New Step Services Co. business interests? new trends and its opening up to international and those who do not will be left worse off. The (Distributor of New Chinthe Concrete Brand) DHW: In 1998, I was engaged as a contractor markets? capacity to tie up, in turn, is dependent on the Square Power Group Co. (Cement Factory) to construct most of the FMI City; Yoma Bank DHW: As Myanmar opens up, we have more track record of the companies. Depawaddy Co. (Construction and Property neighbourhood centre, sports club and more foreign investors coming in and we are also MI: From a business perspective, what do you Development) than 300 bungalows. In around 2000, there subject to more competition. My businesses feel are the biggest challenges facing you in the Profession: Businesswoman was a serious economic crisis in Myanmar, with need international partners to replace and next one to three years? Vice President of the Myanmar Women uncontrollable inflation, as well as a banking upgrade old machines and capital injections to DHW: I felt the biggest challenge would be Entrepreneurs’ Association (MWEA) crisis. The construction industry was in recession and I was in serious debts, as the prices I agreed MI: When did you start your first business in with FMI for construction were now falling Myanmar, and is it still operational today? If so, below the cost of my materials. It’s like a famous how has the business model changed from when Myanmar proverb, “Twat Yay Taw - Sat Tha you first started? Htay, Twat Kyi Taw - Sat Ma Shi”, which means DHW: In 1987, I tied up with a contractor “At the time of planning, I was a rich factory to build apartments over the land that I owner, by the time of the actual audit, I did not owned in Yangon. After the 1988 student’s even own the machines”. In 2004, I was offered demonstrations, the contractor ran off and I the position of Managing Director at Chinthe was left with a half completed property without Concrete, a company controlled by SPA (Serge a roof over my head. I had no choice but to Pun and Associates), a related company of take charge and complete the construction on FMI. When the five year investment license my own. I took everyone from labour leaders to was completed for Chinthe Concrete in 2009, painters to engineers as my teachers and tried the company was voluntarily liquidated. I was to learn as much as I could. After the building offered to buy over the assets of the company at was completed, people liked the workmanship revalued book values. That was how I ended up and I was asked to develop my relative’s and from being a contractor developer to the owner neighbour’s plots. That was how I got into of New Step Services Co Ltd (New Chinthe business. It was really boom time for property Concrete). Eventually, I ended up providing one Insider Business 13 www.myanmarinsider.com

the upgrading of skill sets, knowledge and technology. For example, a Japanese group who want to build a concrete factory in the new Thilawa Industrial Zone want to JV with me. They are asking for ISO certification, which I currently do not have. I am therefore restructuring my companies at present to catch up to international levels and standards. MI: Hypothetically, if you were entering into business for the first time in Myanmar, what type of business would you consider as having the most growth potential? DHW: Since I do not know much business outside the construction sector, I do not think I am qualified to answer that. I would of course recommend the construction sector, due to the number of infrastructure projects sponsored by government alone. In terms of margins, MI: What advice would you give to someone I assumed the current position of vice president. ventures from villages and/or farmers. To construction and property development looking to start up a business and invest in MI: Can you briefly explain the activities of the support the government’s initiative to lower typically have margins of around 40 percent, Myanmar? MWEA? poverty across the country, we have also began whereas concrete production and selling only DHW: I believe most foreign investors are DHW: The MWEA is open for all active providing micro loans to some female staff of earns me like 25 percent in a good year. adopting a “wait and see” approach to investment businesswomen or women who are involved the MWEA members. MI: How do you see Myanmar comparing with in Myanmar. I have met up with many; we meet, in business education. Our main objective is MI: As a female entrepreneur running such a its Asian neighbors in the short and long term we greet, we show them around and they go to develop female entrepreneurs. We provide big enterprise, how do you manage to balance future? home. I think they are waiting to ensure that extremely useful networking sessions; new work and family? DHW: The earliest that we can be on par there will be no changes in government policies members can showcase their wares and market DHW: As women, we have to display many with some of our neighbours is ten years. It after 2015. One piece of advice would be, “No their products through monthly gatherings. We fronts. For husbands, we have to take care of depends on the policies of the government. risks, no returns”. If you want everything to be also provide development courses during these them, sometimes sweet talk to them and put The government has to implement policies that ready and stable in Myanmar, you cannot expect events. them in front of us. These little efforts will encourage business growth both in the short to see high returns. MI: How does the MWEA encourage more count a lot towards getting their unwavering term and long term. Businesses, in turn, will MI: In addition to running your own business, women to become entrepreneurs? support. For children, love and affection drive the economic growth. you have also acted as the head of the Myanmar DHW: We provide monthly talks, we provide are a must. There is always a supportive MI: If you could make one major change in the Women’s Entrepreneur Association. How do you guidance to those women in need. We also husband behind every single successful female country for any of your business ventures, what ended up being in that position? realise the importance of education for women. entrepreneur. would it be? DHW: In 1995, Professor Daw Yi Yi Myint, We have done a survey which shows that MI: What would be your advice for aspiring DHW: The banking system and funding for the head of the Yangon Institute of Economics then, families are generally poorer if the women in female entrepreneurs? SMEs. Currently it’s extremely difficult to raise wanted to start the MWEA. She saw an article the family are uneducated. As such, we sponsor DHW: With Myanmar opening up, there are funds for ventures. All borrowings are based about me being the only prominent woman in girls for primary education for five years. We bound to be plenty of opportunities available. on collaterals. There is no such thing as project the construction industry in DANA magazine started that programme (“Foster Mothers”) As such, I would caution them to be more financing yet, so I really hope that there will be and invited me to join to be part of an initial in 2004 and more than 400 poor and goal focused and to take on limited challenges. more funding available for SMEs undertaking gang of 30. I was the MWEA joint secretary for underprivileged girls have benefited from this. Do not do everything, and everyone has projects. eight years, and secretary for another eight before We also provide special loans to fund promising bandwidth!

But never mind, I have music I’ve composed got my reply and it was a resounding… earth I Could Be a Genius and that will be heard around the globe and shattering… Nothing, backed by the Zero played everywhere until everyone knows, Orchestra conducted by Maestro Zilch with the By Henry Ossafagogfa loves, hums and can sing every note. I record always impressive Señor Nada on triangle. my compilations at home, which takes rather Was I surprised? No. Was I disappointed? ith over 60 years of residence on there is now, and I’m a serious sufferer and claim a long time because I’m not a musician and I No. In reality I’ve come to learn that if I’d written this planet, I was planning this the rights! only have a 30-year old keyboard where the keys John Lennon’s Imagine it would have been a year to become an overnight I have the same problem with music, but so stick or when shaken unstuck spring through failure. Indeed, if I’d written every Beatles song, internationalW success. Alas, with the year now as not to confuse I’ll stick to the script for now. the air and bounce off the ceiling. With digital none of them would have been successful because into its twilight the opportunity is fading fast for I begin writing my story and am utterly cheating these problems are easily overcome and some people get listened to and immediately the world to regale my name and revere my very convinced I’m creating a blockbuster that eventually the music is ready to wow the listener liked and others don’t, no matter what they do. being; indeed, I’ll be lucky to be acknowledged will sell millions of copies, be talked about if they are perhaps a little tone deaf, or better That’s life. And, that’s why I’m president of The as an abject failure, let alone a superstar. incessantly in all areas of the media, be quoted still, completely. Don’t Book and Music Genius Society! But who’s interested? Well, I am, so I’ll by friends to their friends, discussed at dinner In a stupor one night I decided to send my This, however, was the first time I’d ever sent blunder on. parties and be highlighted in news programmes “demos” (as the professionals call them) to a very my music to anyone, and it will be the last, not I have a friend who is an international best around the globe when, of course, truckloads famous musician who had a very famous band because I’m a delicate flower, but because my seller, but recently I read about someone else I of cash will come rolling in along with plaudits in the 60s, 70s and 80s, and as my songs were music has melody, a beginning middle and end know and was surprised to learn he’s not only and invitations for honorary university mainly composed in those decades they might with choruses strategically placed - all of which a clever columnist, but has also had a bunch of chancellorships and keys to several cities piling appeal to him. I did consider the fact he was are an outdated concept. books published. Then, I thought, I’ve written up on my doormat. I shall be Fantabuloso, a probably older then than I am now, but hey, I’d calculated that my stardust Maestro must a bunch of books, too (well, I started and will chartbusting superstar. we can’t put off genius because of the minor be around 100-years old and conducting from finish them one day). I imagine being lauded as a literary giant irritation that he could already be with the big a Zimmer frame, yet it appears that he’s still The problem is I get started on an idea and and genius of the written word, making bassoon in the sky, so I winged them on their performing live around the globe doing hip hop, then I read over what I’d written and wonder arrangements to accept my Nobel Prize for way in the distinct belief that if he can still techno and (c)rap, so whatever I had to offer was who on earth would read this rubbish when something extraordinary when suddenly the stand up he’s bound to want to have one more way out of date. there are so many more interesting things out wife tells me the only thing on the doormat hit record. What better last hurrah could there My idea now is that I’m going to pronounce there to enliven the grey cells. But, a glass of is a bill for the electricity and it’s twice as possibly be for this world famous band leader that all the brain dead so called pop and (c)rap wine washes away the negativity and I’m on the much as it was last month, which was already and conductor than a galactic hit album of my of today that attacks my ears and intelligence is road to renown again. acknowledged as the biggest electricity bill in songs? composed by me, thus causing them to be instant Basically, I suffer from “Genius Syndrome”, the world. My genius instantly becomes average I waited for a response, and, then after failures and never played over the airwaves. and if there isn’t a syndrome known as that then at best; a sort of genius brewers droop! what seemed like months (because it was), I How about that for genius? insider REVIEWS 14 www.myanmarinsider.com Jasper House By Wes L. Byron asper House sits in the pleasant buffer zone between Yangon’s Dagon and Ahlone Jtownships. On one side lie the leafy, pleasant homes from colonial times, while just a few hundred yards further west you’ll find yourself in the city’s lively industrial district that sits near to the river. Opened in 2009, the venue has recently changed location to its current building; an impressive 100-year old colonial building that was apparently once home to the hand doctor of a British Prime Minister during the country’s colonial days. Inside, the owners have done a job of maintaining it in a stately way. Art adorns the walls and there’s a chandelier greeting you upon your entrance. Despite the elaborate design, Jasper House’s prices are well considered. With the restaurant specialising in Thai food, it seemed silly not to try the Thai Green Curry (K4,200) with rice, while my friend ordered the Steamed Crab (K6,000). The curry was just right, both in terms of taste and spiciness. I’ve had better, admittedly (there is always room for improvement, eh?), but then again, I’ve certainly had worse. For such a price, I can hardly complain. Meanwhile, my friend made what seemed to be satisfied grunting noises as he devoured the Crab. The coffees are good, particularly during the evening, as the outside area is a pleasant place to enjoy a drink. There’s a paradise-esque and well stocked bar in the restaurant’s calm, makeshift garden. Certainly worth checking out if you happen to be in the area! Pyin Oo Lwin: Myanmar’s Garden City By Kyaw Zaw Shwe

ess than an hour outside Mandalay, the and with just two days in the town, it was as good a heavy Muslim influence, both in its architecture and the house itself sitting high on the hill. The temperature drops suddenly. of a place to start as any other. and general population. house is usually used as a hotel, too, but I arrived L For the first time in months, I reached My friend and I ducked into a tiny alley and Myanmar has been beset by ethnic tensions in just a few days before an ASEAN convention and it for my jacket and stared out the window as our rusty the familiar scent of Myanmar markets hit us recent months - most notably between Buddhists was under high security. “Can I go inside?” I asked old Probox taxi coughed and spluttered its way up immediately. Here was the scent of spices and the and Muslims - but in Pyin Oo Lwin, there seemed the guard, and he offered back a reluctant shake of the hill. To my right, the impressive Shan Plateau overpowering smell of dried prawns, and a whiff to be not a single ounce of friction between the the head. I knew not to push it further. stretched out ahead of me to the horizon and, with of raw meat somehow forced its way into my different races. I ducked down a narrow street and Hardly surprisingly (given the name), the a few more whimpers from the old tinbox, we were nostrils. It was calm, though, something which still came to a beautifully intricate mosque. I poked my Governor’s House was once home to the Governor into the picturesque Shan Hills. surprises me about the market, and we were able head around the corner and was met by a smiling of Burma during British rule and, while it’s run a A few more putters and, shortly before the to casually stroll through the stalls - occasionally Muslim man. little bit into ruin today, the grand structure and car felt like it was going to cut out completely, we covering our noses with our shirts to save us from “Come in, come in, my friend,” said U Win impressive view give at least some idea of the sort rolled into the former hill station of Pyin Oo Lwin. the smell - and enjoy the friendly, smiling faces that Thet. Despite living in Yangon, U Win Thet goes to of grand life the Governor lived. Established as a hill station during British came beaming our way. Pyin Oo Lwin regularly to visit family and get away One of Pyin Oo Lwin’s most attractive features colonial rule, the town was originally named There are few foreign faces here, so when the from what he says is general chaos in the ex-capital. for visitors are the Botanical Gardens, which lie in Maymyo - literally “May’s Town”, after an officer locals see one in this part of town, they are very Eventually our conversation moves toward the the south of the city. The well manicured gardens named Colonel May - by the British, who would willing to have a chat. Due to the British influence issue of religion and I remark to him how surprised are bordered by a collection of trees from around use the town, much like I did, as sanctity from the here - which is perhaps stronger here than in any I am at the harmony in the town. the world, all set amongst several manmade lakes searing heat down at sea level. other town in the country - the majority of locals “Yes, yes. This is a very pleasant place. In other that stretch throughout the grounds. The wildlife Much to my surprise, Pyin Oo Lwin was speak flawless English and are eager to practice it parts of the country, we [Muslims] have problems is varied, too, with black swans from Australia an incredibly easy break from Yangon. An early with any passing tourist. to travel. But not here; people are calm. How can living on the lake. morning flight to Mandalay, an hour and a half Meandering through the streets I was struck you get angry in a place like this?” Visitors are able to take advantage of motorised taxi ride from the country’s second city and before by the diversity of races in the faces of the people The majority of attractions in Pyin Oo Lwin buggies - which also take in a butterfly museum and it had even reached 9.30 on the Saturday morning, going about their business in the town. There are away from the main part of town, so I hired a an orchard nursery - but if the weather is fine, as we’d rolled up to our hotel. were Burmese with strong European features - motorbike from a local on the street and zipped out it usually is in Pyin Oo Lwin, then a much better Purcell Tower is the main centre point for supposedly Anglo-Burmese - as well as a healthy to explore the nearby waterfalls. As I was leaving the option is to walk. the town, but apart from a lively market and a mix of Chinese, Indian and even a few Tibetan town, however, a soggy blanket of cloud appeared It’s a huge space and a few hours can easily be few pleasant cafes, the real charm in the town lies features here and there. On one building I noticed just as I noticed a sign for the Governor’s Residence. spent roaming the gardens, and with the impressive elsewhere. Still, there are few better ways to get to what appeared to be a Star of David (the symbol of Today, the Governer’s Residence operates as a range of flowers and plants on display, it’s the perfect know a place than taking a walk around its centre, Judaism) above the entrance. Pyin Oo Lwin also has high end hotel, with a number of attractive cottages break before returning to working life in Yangon. insider NEWS 15 www.myanmarinsider.com

Airport Privatisation to Boost Taxes and Benefit Local Players yanmar has announced plans to privatise all domestic airport Mmanagement businesses. While it has been suggested that the scheme is aimed at promoting the civil aviation industries in Myanmar, we believe that it is also intended to increase tax revenues to fuel the country's airport expansion plans, as well as to develop civilian airline facilities, to upgrade existing facilities and to reduce governmental spending on such infrastructure. We further note that this scheme is unlikely to benefit international airport operators, as Myanmar's airport industry remains closed to foreign participation. The final decision on the financial, technical and performance capacity aspects of the initiative have yet to be finalised. Of Myanmar’s 46 airports, 16 are not currently operational.

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Contact Details: Travis Okar Swe • Crystal Phyu Phyu Thant • Tancy Thwel Khaing Zin ([email protected]) Phyo Naing Win ([email protected]) Insider special 16 www.myanmarinsider.com The 2013 SEA Games

At this year’s SEA Games will be the cream of Southeast Asia’s athletes competing in 33 different events.

The first SEA Games was held in 1959 and was then known as the “South East Asian Peninsula Games”, or “SEAP”, until the 1977 games when it officially changed it’s name to the present South East Asia Games. In May of 1958, the concept for the competition was devised in Tokyo, as a means to help promote cooperation and good relationships amongst the countries of the Southeast Asia region. The games are a biennial sporting event held between the 11 countries of Southeast Asia and regulated by the South East Asian Games Federation, with the supervisory bodies being the International Olympic Committee and the Olympic Council of Asia.

Myanmar, or Burma as we were then known, previously hosted the games in 1961 and 1969, proudly winning 35 gold medals at the 1961 event, and, for us, a whopping Weightlifting - A Heavy Task 57 gold medals in 1969. Our total number of medals won to date is a respectable 1858. Without the benefit of any pre 2013 SEA Games Although, when comparing that haul to Thailand (with a total of 5025 medals) and competitions, the Myanmar up and coming bunch of new competitors were chosen to face the hard task against the teams Indonesia (with a total of 4410 medals), we still have a long way to go. from Indonesia and Thailand in particular. So let’s get started… Out of the 11 categories, the Myanmar team will compete in nine - five for the men and four for the women. The best of luck to all the competing participants! As the host nation, our weightlifters are being trained by foreign coaches in the hope of attaining at least one gold medal.

Sixteen of our Best Archers At the 2011 SEA Games in Indonesia, the archers from our Myanmar team competed at the highest level and bagged a total of three gold, one silver and three bronze medals. This year’s compound competition showcases the talents of a squad of 16 of our most talented archers, eight being national players already. In the men’s compound event, four of our best (Ko Shein Htet, Ko Sai Zin Min Htet, Ko Lin Naing and Ko Aung Chaint Thaw) are ready to bring in the gold. The women’s archery team, who we forecast will win gold in the compound event, consists of Ma Yaw Sein Ya, Ma Aung Nghein, Ma Hla Hla San and Ma Aye Aye Thin. Insider special 17 www.myanmarinsider.com 2013 SEA Games

$10K For Taekwondo Gold Chinlone and Vovinam been in training for this competition since February and, as Great news for our Taekwondo team: The Myanmar Are these our best chances..? Many sports minded people one might expect, they have an excellent chance of bringing in Taekwondo Federation announced that it would give US$10,000 that I’ve been speaking to over the past few months sincerely the medals, especially the much coveted golds. The chinlone to each gold medal winner. believe that we will shine and get the golds in both chinlone and competition will take place at the Wunna Theikdi Gymnasium That gives each of the seven male and nine female competitors vovinam, which are traditional games for us. Especially chinlone. in Nay Pyi Taw. a great chance to really bring home the gold… There are a total of However, most of the expats that I spoke to have never heard In the vovinam event, Myanmar’s women’s team of 12 21 gold medals on offer as all 11 member countries will compete of either of them, but for us, they are way up there. players have to compete against strong opposition from in the Taekwondo event to be held in the impressive 3000 seater For those that don’t know, chinlone is over 1,500-years old Cambodia, Indonesia, Laos and Vietnam, but are confident Wunna Theikdi Gymnasium at Nay Pyi Taw. and was once played for Burmese royalty. Over the centuries, of bringing home more than their fair share of the 18 gold To date, Myanmar Taekwondo Federation members players have developed more than 200 different ways of kicking medals on offer. competing at the SEA Games have bagged a whopping 44 the ball. Many of the moves are similar to those of Burmese The 22 strong men’s vovinam team are insisting that they medals, including three golds, seven silvers and 34 bronze. dance and martial arts techniques. Some of the most difficult will do equally as well. strokes are done behind the back without seeing the ball as it is kicked. Form is all important in chinlone; there is a correct On Track (& Field) to Take the Golds way to position the hands, arms, torso and head during the At the 26th SEA Games held in Indonesia, we did not moves. A move is considered to have been done well only if get one gold medal in the track and field competitions. The the form is good. best that we could manage were three silvers and one bronze. Vovinam is a self defence martial art developed in Thailand, This time around, with the expert training of 30 coaches based on the principle of “between hard and soft”, and uses (9 being foreign) plus sending two groups to China for special the force and reaction of the opponent. Vovinam also includes middle and long distance running training, we have a great hand, elbow, kick, escape and levering techniques. Both attack chance of bagging at least a few golds. and defense techniques are practised, as well as combat and The team consists of 34 men and 25 women and the traditional wrestling. The wide range of techniques include competitions will be held at the Wunna Theikdi Gymnasium punching, kicking, wrestling, sword, staff, axe and folding fan, in Nay Pyi Taw. among others. Let’s see if we can beat our record of 9 golds for the men In the Myanmar men’s and women’s chinlone events, there and 11 golds for the women, which was achieved the last time are three different categories for them to compete in. They have that we hosted the games in Yangon in 1969.

Nay Pyi Taw, 4th December

Myanmar’s women’s chinlone team provided additional motivation for the host country’s athletes, as the side claimed the first gold of the 27th SEA Games. The medal was won in the primary level same skills event, with Myanmar finishing ahead of second placed Thailand by some 160 points. insider business 18 www.myanmarinsider.com

million respectively from the previous fiscal Investment year. Concerted efforts are being made for 3 million tons of rice to be exported during 2013-14; so far a total of 2.1 million tons has Opportunities in been achieved. Beans, Peas & Pulses Myanmar Agriculture Myanmar was once the world’s biggest rice exporter, a position long since lost due to By Malcolm Macpherson decades of economic mismanagement, which the government is now undertaking to rectify, and is making it a high profile ambition and a priority within the agricultural sector that Myanmar will once again occupy the position of being the world’s number one rice exporter. While the emphasis is being placed on rice, the production of beans, peas and pulses is of equal agricultural importance; representing alternative cash crops for around 10 million people who are tied to the trade, most of them farmers and their families. In fact, in terms of exports, although having a much lower profile than their rice counterpart, this sector of Myanmar agriculture generates a greater income than that obtained from rice. Products catergorised as being of the t this crucial stage in Myanmar’s agricultural sector, such as the commitment signed Memorandums of Understanding with beans, peas, and pulses sector covers a large development, it is essential that given by the chairman of Japan’s Mitsubishi MAPCO for the establishment of integrated variety of crops; the most popular in terms emphasis is placed on investment in Corporation, who has stated that his company food and energy factories; advanced rice of production and export includes black eyed Arural areas, where 70 percent of the country’s is ready and willing to assist Myanmar in grinding and purifying mills will be set up in beans, pigeon peas, black matpe, lima beans 60 million plus population resides. Employing upgrading its infrastructure and bolster the Yangon, the Ayeyarwady Region (the country’s (butter beans), chickpeas, mung beans (both some 65 percent of the labour force, agriculture agricultural sector. main rice producing area) and the Bago Region, green and red), red kidney beans, niger seed, is the single most import sector in the Myanmar home to the Shwegyin hydropower plant, as sesame seed (both white for the food industry economy, accounting for approximately 60 Agricultural Development well as the capital of Nay Phi Taw. and black for oil extraction) and lentils, which percent of the country’s GDP. The International Fund for Agriculture These processing plants will form part of provides for a rich source of protein; these Development (IFAD) is financing a programme the Integrated Rice Complex Project, which pulses are exported both whole and split in a Much Needed Finance to carry out an 18-month project for aims to produce 400,000 tons of rice for export variety of colours that range from white and Development in rural areas and agricultural development, focusing on capacity per year, which will also create other food yellow to red, green, and orange to brown and improving the livelihood of farmers must building courses for rural workshops and the products such as rice bran oil and rice noodles. black. remain paramount; focusing on agriculture implementation of good farming practices, In addition, these factories will be fuel efficient, The cultivation of beans, peas, and pulses is key to providing a relatively quick method animal care and husbandry. Participants will powered by the rice hulls resulting from the in Myanmar is primarily a legacy from the for the eradication of poverty, but it is only include civil society organisations, local and processing procedures. days of British rule when these products were a partial solution, and must go hand-in- foreign volunteers, together with government established as export commodities, primarily to hand with investment in infrastructure to departments. The project will run from October Boosting Rice Exports service the Indian market. While today these drive agricultural growth and productivity. 2013 to March 2015, and will be implemented The chairman of the Myanmar Rice crops are exported to many countries, India One of the major problems is an inadequate in central Myanmar in three villages located in Industry Association, Chit Khaing, who is also remains the singular most important customer; transportation system. This sector of the the Magway Region, the largest of the country’s the head of MAPCO, is enthusiastic about with vegetarians representing between 30 and economy requires much needed investment seven divisions, with an area of 44,820 square Japan’s investment in Myanmar’s rice industry, 40 percent of its 1.2 billion population that in order to be upgraded and eliminate the kilometres. which will ensure the industry’s longevity and consumes these protein laden beans, peas, and present inefficiencies to reduce the high cost greatly assist in boosting the country’s quest to pulses instead of meat. of bringing produce in from rural areas. A High Quality Rice regain its status as one of the world’s top rice These crops are extensively grown in common complaint is that the freight costs The IFAD is also coordinating large exporters. five of Myanmar’s divisions; Ayeyawaddy, involved in moving rice from the Irrawaddy investment projects by the private sector on Despite Japan having the most protected the delta region of the Irrawaddy River; Bago Delta to Yangon for export is more expensive required high technology and processing rice industry in the world, the joint venture in the southern central part of the country, than shipping the rice from Yangon to plants for export of agricultural produce operation with Mitsui has resulted in Japan Sagaing in the north west, which borders on Singapore. to international markets. One such project importing 5,000 tons of long grain rice India’s Nagaland and Manipur States to the involves the cooperation between the Myanmar from Myanmar for the first time in 45 years. north. The important region of Mandalay, Foreign Engagement Agribusiness Public Corporation (MAPCO), MAPCO is also entering into a joint venture which accounts for 15 percent of the country’s The Myanmar government is acutely and the Japanese trading house, Mitsui Co. with Mitsubishi, whereby the Japanese national economy, in addition to the important aware that agriculture is a major source of Ltd., who have formed the Myanmar Japan conglomerate will mill tropical japonica rice. city of Mandalay, the southern part of the income for the country; making crop and Rice Industry Co. Ltd, (MJRI). This particular type of rice is used to produce region is also home to the national capital Nay farm development an essential part of their Mitsui is providing the MJRI operation the thin rice cakes that are a particular favourite Pyi Taw, and Magway in central Myanmar, the investment programmes, they are actively with a US$100 million investment in technical with the Japanese populace. largest of the country’s seven divisions. seeking to promote more growth and stability aid and processing equipment to produce In September 2013, the Myanmar for this important part of the country’s high quality rice. The objective is to produce Ministry of Agriculture and Irrigation and the Infrastructure Challenges economy, not just for the dominant rice sector sufficient quantity to allow for the export of International Rice Research Institute (IRRI) India imports over 4 million tons of but also for other cash and industrial crops, as 100,000 tons, and 5,000 tons (as part of an signed a Memorandum of Understanding in beans, peas and pulses each year. For Myanmar well as livestock. introductory and educational programme), to Nay Phi Taw for the development of Myanmar’s to further increase its share in this market and As of July 2013, foreign investment be sold in the domestic market. agricultural sector. Both sides discussed establish a foothold in newly opened Western in Myanmar’s agriculture amounted to Mitsui and the Vietnamese investment Myanmar’s rice research and development, markets for these crops, this agricultural sector US$185.451 million since the country opened management and real estate development together with world food sufficiency plans and must first deal with overcoming the same to such investment in late1988, but this only firm Vina Capital will join MAPCO in strategies in conjunction with the international internal infrastructure challenges faced by its accounts for less than 0.5 percent of the total Myanmar’s agricultural development. Under rice market. rice growers and traders. amount of foreign investment nationwide. an integrated rice complex project, a rice mill Myanmar exported 1.3 million tons of In some cases, it can take two or three However, the government has recently seen with a 50 ton daily capacity will be built in the surplus rice, gaining US$544 million in 2012- days for a truck to reach Yangon from upper some encouraging foreign engagement in its Ton Tay Township of Yangon. They have also 13, up from 707,200 tons and US$267.2 Myanmar, poor roads mean smaller trucks, insider BUSINESS 19 www.myanmarinsider.com

herbicides and fertilisers, these crops, by While substantial steps are being implemented comparison, are extremely resilient and to redress and improve these imbalances, there require little in the way of maintenance when is still much to be done. Agriculture remains commercially farmed. under-capitalised, presenting tremendous Jute is one of the most affordable natural prospects for foreign financial firms to provide fibres and is second only to cotton in quantity funding for farmers, enabling them to have produced and the variety of uses of vegetable access to capital, better seeds, and better fibres; with a long established history, jute technology. is spun into rope and twine and a multitude Agriculture represents one of the best of other products like carpets, rugs, canvas, opportunities for foreign investors looking to hessian cloth (for use as bags and sacks), make an impact in Myanmar; this they can wrappers, wall coverings, upholstery, home achieve by providing funding for agricultural furnishings, and construction fabrics in the land or to lease land to initiate new cultivation manufacturing industry. themselves. Alternatively, investors can become Kenaf, which has properties akin to jute involved with international agricultural and can be used in similar applications, now has companies wanting to enlarge their operations an established reputation as a viable alternative in Myanmar, or start their own agricultural for use in the newspaper industry. Newsprint enterprise by leasing land and contracting made from kenaf provides stronger, brighter farmers. Another option is to establish a joint and cleaner pages than the standard pine paper, venture operation by providing capital to one which in turn increases costs. Moving zones across the country as a continued and and is less detrimental to the environment. of the numerous medium-sized Myanmar agricultural produce by river is usually a expansive effort in the development of such Due partly to kenaf fibres being naturally companies looking to expand into agriculture. cheaper alternative, as larger consignments can crops to boost production and exports. whiter than tree pulp, less bleaching is required Unbridled growth potential exists in be accommodated on one journey, but only too The UMFCCI is also emphasising the to create a brighter sheet of paper. Hydrogen virtually every facet of Myanmar’s agricultural often this is not an option due to the majority importance of Myanmar expanding its presence peroxide, an environmentally safe bleaching industries. In the seed industry: agro chemicals, of the available river vessels being too old or internationally and the financial benefits that agent that does not create dioxin, has been used fertilisers, pesticides and plant protection too small. Making better use of its rivers, such can be gained through extensive cultivation of with much success in the bleaching of kenaf. sectors. In customised mechanisation and as the Irrawaddy and the Chindwin, should quality strains of crops and use of fertilisers and A variety of cultivated spices provide for new agri equipment technologies: irrigation provide the cheapest and most effective mode pesticides. other alternative export crops, including red (including dams); reservoirs; ground water of transport, but in the dry season the level of and green chilis, caraway, coriander, ginger, harvesting and conservation; improving water in the Irrawaddy is often too low to allow Alternative Crops pepper, tamarind and turmeric. livestock and animal husbandry practices; for large vessels to pass. These are problems Some oilseed bearing crops that have together with animal feed and grain demands; that the Directorate of Water Resources been severely neglected in recent years are An Increasingly Important Crop applications and organic farming; and good and Improvement of River Systems are now now making a recovery and registering steady In 2012/13, corn production was at 1.5 agricultural practices. addressing and working to rectify. annual growth rates. These include cotton, million tons, up 15 percent from the previous Agricultural production and processing which in addition to producing the basic raw year. This is forecast to grow to 1.8 million tons operations are in need of educators to provide High Quality Produce material from which cotton fabric is derived, during 2013/14 as the planting area is due to specialised guidance to improve plantation According to figures issued in 2007- its seed is an important source of edible oil, and increase by 17 percent to 450,000 hectares, with crops like rubber, jute, kenaf, and biofuel 08, Myanmar exported 1.177 million tons of the remaining residue from the oil extraction higher average yields of 4 tons per hectare due crops. Specialists are also required in the various products catergorised as falling within process provides for a high fibre animal feed. to the use of better seed varieties and increased post harvest and value added processing the beans, peas and pulses sector, earning a Other important oilseed crops that have demand from domestic and Chinese feed mills, industries, including quality milling, storage total of US$670 million. Since 1988-89, the made a comeback include sunflower seed as well as an increase in contract farming. Corn and packaging technology. Investment cultivated area of such crops has gradually and groundnut, both of which provide for is becoming an increasingly important crop, opportunities are also abound in other essential grown year by year, and now exceeds over 3 multipurpose applications: oilseed crushing with growth in production now a necessity in services related to agriculture: in transport and million hectares. Myanmar has now become for high quality vegetable oil and animal feed order to keep pace with demand with domestic logistics; agricultural cooperatives; credit and the second largest beans, peas and pulses applications or as a human food source; and corn consumption forecast to reach 1.4 million insurance; and establishment of institutions to exporter in the world after Canada and enjoys a soybean, which has similar applications, is a tons in 2013/14. oversee adherence to international food quality reputation for high quality produce. relative newcomer to the make up of Myanmar Animal feed consumption accounts and safety standards. Myanmar’s rigid and non-progressive agriculture, but which is rapidly gaining in for some 78 percent of Myanmar’s total The diversity of Myanmar’s agriculture banking system of the past, combined with popularity with production having more than corn production. Traditional livestock feeds provides for many opportunities in investment an absence of the micro-financing and doubled in the past 10 years. are being increasingly substituted with and development. Even with only half of its 45 technological improvements that boosted The Myanmar Rubber Planters and compound corn feeds, especially by poultry million acres of arable land under cultivation, agricultural production in neighbouring Producers Association (MRPPA) said it and aquaculture producers. Most of the corn the country produces enough crops to countries have heaped additional challenges estimates sales of 150,000 tons of raw rubber goes to commercial processing mills in Yangon, comfortably feed itself. Consequently, there is on Myanmar’s farmers involved in the beans, in 2013, up from the previous year’s total of Mandalay, and Shan State for feed applications enormous growth potential, particularly for the peas and pulses sector, most of whom are 95,000 tons. In the past, exports have depended in contract farming systems. Additionally, in development of export markets. small, with one or two hectare holdings; they almost entirely on sales to China, but new hill regions like Chin State and other drier parts lack the finance to enable them to invest in customers are being established in Southeast of the country, when rice is in short supply A Future Agri-Economic Force improved seeds and technology and are in need Asia with South Korea, Vietnam and Singapore and becomes too expensive, corn serves as an The Myanmar government is committed of financial support. now appearing as regular buyers. alternative staple food. to boosting agricultural growth and The authorities have finally recognised The total area of rubber plantations in The latest annual corn exports are estimated productivity, aware that this sector of the the needs of these farmers, and in order to 2012 was 450,000 acres (182,000 hectares), at some 300,000 tons with China accounting economy is by far the country’s largest single provide the necessary assistance and maintain with the lower Myanmar states of Mon and for 75 percent of the total. However, with most employer, and achieving improved living Myanmar’s established name as a reliable Karen being the main export producing areas. of this trade being conducted through informal standards in this area will make a significant producer of quality crops and its status in The MRPPA is now making concerted efforts cross border channels, there are a lack of official contribution to reducing overall poverty. the world market place, the first international to obtain the participation of the international records of these transactions. Indonesia and Focus on agriculture can also ensure standard beans, peas and pulses wholesale community, but the country needs to learn Malaysia account for the remaining balance of that Myanmar’s economic growth is balanced centre is now being set up in the country. from rubber plantation experts. Myanmar Myanmar’s corn exports. and sustainable over the long term. With The project will be implemented by the requires investment in new technologies and the government actively promoting and country’s biggest business organisation, the skilled technicians in order to improve product Unbridled Growth Potential encouraging foreign investment in this sector, Union of Myanmar Federation of Chambers quality to enable the country to compete in While Myanmar is richly endowed this will enable them to ensure that controlled of Commerce and Industry (UMFCCI), which overseas markets, especially within the EU. with extremely fertile land and generations stability and security for its agricultural-based has appealed to the domestic merchants to Other industrial crops, such as jute and of farming experience amongst its rural society is maintained for the foreseeable future. take part in the move; calling for extended kenaf, provide for viable alternative sources population, it suffers from low productivity due In the near term, this can assist the country in cultivation of marketable beans, peas and pulses of natural fibres and, unlike cotton, which is to many years of neglect, lack of investment in becoming a major food supplier and an agri- with the establishment of special cultivation heavily reliant on the application of pesticides, technology and in research and development. economic force within the region. insider culture 20 www.myanmarinsider.com A Tour of Yangon’s Architecture By Shwe Sin Hnin

front office blocks and condominiums sprout up, but the city is still dominated by the more traditional aspects of Asian architecture, mixed in with further influences from abroad. A little known synagogue sits in the middle of the city’s downtown area. Built in 1896, while still under British rule, the Musmeah Yeshua Synagogue was built for the increasing number of Jews that were arriving from the Middle East region. Once home to 2,500 Jews, many left during the brief Japanese occupation during WWII. Today, there are around 20 permanent Jewish residents in the city, but with an increasing number of visitors coming from abroad - both to live and visit - the synagogue is attracting an increasing number of worshipers. Little known, too, is the Armenian influence, and it was two brothers - the Sarkys Brothers - from this region that built one of Yangon’s most prominent structures, The Strand Hotel, which was completed in 1901 and has checked in famous names including Somerset W Maugham, Mick Jagger and Oliver Stone. A great number of Armenians emigrated across the Asian continent in the 17th and 18th centuries and, by the 19th century, many of those ended up in the country that we today know as Myanmar. The Armenian Apolistic Church of St. John the Baptist is the most prominent Armenian structure that still stands today and angon’s Strand Road was once one of to prominence after the British took over the The Secretariat has a special place in the attracts a few tourists thanks to its unique the most important roads in the whole country in 1886, making it a province of British hearts of the people of Myanmar. Completed design. Completed in 1862, it is located on of British India. Here, merchants, India. Burma, as it was known, was until then in 1905, the British used it as their central Bo Aun Kyaw Road, close to the Secretariat Ybusinessmen and members of the British Army a Royal Kingdom. King Thibaw and his Queen parliament until they left, and it was in a small Building. would arrive, weary after months of travel from Supayalat ruled from their golden palaces in then room here that the country’s independence Add to these heavy influences from their homeland. Some would stay in the then capital Mandalay, but when British troops stormed hero, Bogyoke Aung San (father of democracy Central Asia, China, Hindu temples and capital city, while many would venture into the into the city and ousted him and his wife to some icon Aung San Suu Kyi), was murdered traditional Burmese culture, and you find deep jungles to explore the country and her rich quiet corner of Western India, Burma came under alongside seven of his associates by a jealous yourself in a city that offers as unique a mix resources that continue to attract people today. British rule and they moved the capital city to political arrival. Each year, on the anniversary of architecture as any city in the region. New arrivals fresh off the boat would have Yangon in order to take advantage of the city’s of the murders - July 19th - Martyrs’ Day is The challenge now, as the city attracts been instantly met by the domineering structures close proximity to the sea. celebrated across the country. unprecedented foreign interest and investment, of the Royal Law Courts, the Port Authorities So began the complete transformation of the Today, the building is heavily guarded by is to ensure that these impressive structures and the offices of the Burmah Oil Company - city. Until that point, Sule Pagoda sat virtually high fencing and, despite a few glimpses here are maintained. It goes without saying that which would later become British Petroleum. alone in the middle of a dense forest, but the and there, it is difficult to get a real feeling some will fall foul. Some will deservedly be The buildings remain to this day, some in varying British decided to use it as a physical centre point of the building. This may change in the near hauled down due to safety concerns, but what states of disrepair. and built some impressive structures around it. future as it was recently announced that the government must ensure is that those that The wide, boulevard-like Pansodan Road Fytch Square (now Mahabandoola Park) was built companies have submitted proposals to turn can remain standing are allowed to do so. was an important thoroughfare in the city, too, to the south, to the north the prominent City the site into a cultural centre and museum - it is One Yangon citizen recently referred to and to each side the impressive structures from Hall and to the southeast the beautiful redbrick hoped by many that authorities will choose this the practice of “cultural genocide”, meaning the British days remain. Some have fallen into High Court. option for the historical building, rather than that if structures that say so much about a city’s such a poor state that it’s difficult to see how The redbrick structures were strong the predictable hotel or shopping complex. culture and history are torn down to make way they can be restored, while others have been representations of British architecture at the time, While British architecture is certainly the for more generic modern structures, then that well looked after and continue to function as with the most notable being built slightly further most prominent in the former capital, what is aspect of the city’s past could be lost forever. offices today. east on what is now Bo Aung Kyaw Road, the most impressive about the city is its range of The Yangon city planners must ensure Yangon - then Rangoon - only really came Ministers’ Building (now known as the Secretariat). architecture. All across town, modern, glass that, as the city changes, this does not happen. insider BUSINESS 21 www.myanmarinsider.com

tenets gone the way of extinction? Not really… because when it comes right down to the core of that onion sans the layers of media options, CRM programmes, events, online and offline Marketing in Asia activities, loyalty programs and what have you, what you have still holds true to successful marketing, branding, advertising, distribution and pricing; meaning that one has to do their A Complex Choice homework to establish product or corporate positioning. This means continuous qualitative and quantitative market research By Charlie Greene to fully understand what the target consumers desire and want demographically and psychographically. One has to understand what motivates their target consumers whether they are children, teenagers, young adults, mothers, businessmen or senior citizens, and the more one studies these different consumer segments, the more one realises that the core motivators for brand values almost always remain the same. Value for money is not solely about the practical mind, but about emotional value which can be about affinity, intuitions, prestige, status, etc. Peer affinity is always a factor with the youth market that never changes. They have to have their own music, clothes and language. Marketers should not let the layers of technological marketing development cloud out the core values of human motivation. A successful brand has a likable personality - like a human personality - that people can relate to. International brands like Coca-Cola, Sony, Levi’s, Nestle, Honda, Starbucks and HSBC understand the importance of a brand’s perceived value. People prefer to purchase brands they know and have an affinity with. We can then say that the underlying branding truth underneath all these layers of “change” is that the core values of successful branding remain the same. Consumers make brand choices based on the perceived value of a brand and its personality. The growing challenge for marketers is to make sure that all the layers of their brand stay focused on the image they want the target market to perceive, whether it is a loyalty programme, a CRM programme, online, offline, brand activation or what have you. Every single layer of the brand thrust becomes part and parcel of its perceived image. In retrospect, branding is, in its most basic form, the understanding of human behavior. Nothing more. he times they are a-changin,” warbled poet and you have teenage kids you will know them for their perplexing Nothing less. It is all about common sense. The rational and songwriting legend Bob Dylan. Nowhere could ability to watch television while doing homework and chatting emotional behaviour of people has always been driven by the same that apply more than the dynamic, fast rising, online while listening to their iPods - they just seem so relaxed forces. Stay focused and the choices may not be that complex. booming“T and complex markets of Asia. and at ease doing so. The 21st century has been referred to as the “Asian Century” Even “older” consumers have been caught up in rapid whereby Asian economics, culture and politics will dominate modernisation and instant communication. The mobile phone over the next 100 years as Britain and America ruled the 19th in Asia has become the most pervasive electronic tool by far, and and 20th centuries respectively. What was speculation before is will become even more so. In addition to the already countless now emerging as reality, as more emphasis worldwide is placed functions mobile phones now carry, internet games, banking on the growing economic powers of China, India, Japan, as well and cash cards are additional functions already in place in some as East Asia, South Asia and Southeast Asia. With nearly four leading Asian countries. You really will not be able “to leave billion people - home to about two out of three of the world’s home without” one. population and projected to grow to five billion by the middle Given the complexities of the target markets’ ever changing of the century – it’s no wonder that many western corporations attitude and desires, marketers find themselves even more and brands have either expanded existing operations here in Asia confounded with the growing list of media and advertising or have moved in belatedly. Local Asian brands have hunkered vehicles, whether traditional or not, to attempt to get over the down to both defend their local markets and expand globally. equally increasing noise and clutter. Traditional marketing and What marketers are discovering about Asia’s rich and culturally its subsets of branding, distribution, pricing and advertising just diverse markets are unique, often complex branding challenges, aren’t enough anymore. One has to have Customer Relations as consumer attitudes and desires seemingly change as rapidly as Management (CRM) programmes to keep current target the mobile phones Asian consumers cannot live without. consumers satisfied. It’s not enough to build a brand image, Make no mistake about it: Asians are responding to personality and franchise system through traditional media the influx of rapid worldwide technological development anymore, but instead it has become more effective to develop like ducks to water. Already, the largest percentage of the 1.6 your brand via the internet, mobile phones, event marketing and billion internet users worldwide are in Asia. Over 90 percent loyalty programmes. A brand has to become activated to be an of the world’s internet video games are conceptualized and integral part of the consumer’s life… at their clubs, bars, concerts produced in South Korea. Every global brand worth its salt has and hangouts. Better yet, brands stage the events themselves. established a headquarters in Asia to capitalise on the regions Sales promotions once deemed harmful to a product image if veritable unlimited opportunities. It has not come easy; to most continually run are now disguised as loyalty programmes. Brands marketers, Asian consumers are more knowledgeable, more have to be ever present. The once broad line between brand discriminating and curious, but with shorter attention spans. building and hard selling has blurred. Some marketing gurus see Except for Hong Kong and possibly Singapore, Southeast Asian the new markets as horizontal and not vertical anymore. Does markets and China are young markets. It is this attractive youth that mean a less focused shotgun marketing approach is now market - where brand loyalty is built - that marketers stand the norm? perplexed. These are energetic, ambitious, highly motivated, If one likened the Asian marketing world to an ever growing multitasking, upwardly mobile, much sought after youth with layer by layer onion, and this onion had a core of truths, that seemingly unlimited choices, determined, as other youth have core would have seemingly been crushed under the weight of done before them, to burn their own paths toward posterity. those countless layers by now. Are there no longer any branding Marketers term these multitasking youths as “Millennials”. If or marketing truths to stand by? Have traditional marketing insider luxury 22 www.myanmarinsider.com Under the Sheets Shalini Mitra

n the west, Egyptian cotton has become a byword for luxury. No five-star hotel room in central London or downtown Manhattan is complete without starched white sheets from Ithe Nile Valley. Sleep experts are waking up to the fact that, since we spend so much time sleeping, to make the most of this time the best quality bedding should be used, which bed linen manufacturers believe is Egyptian cotton. With an established reputation of being the best cotton in the world, the products made with the Egyptian cotton - from bed linen (pillow cases, duvet covers, bedspreads, bed sheets, towels) to bathrobes and high street clothing - are the world’s finest. Marks & Spencer, John Lewis, Habitat, Ikea – they all the fibres straight and intact. Finally, after picking all the cotton, Yousef Cotton shop in Mahla, a large delta city south of Cairo. carry luxury Egyptian cotton bed linen. In Britain alone the it is ginned by roller gins so as not to damage the perfectly “You can’t really tell the difference in the feel of a 300 TC cotton business is worth billions. formed fibres” adds Affifi. fabric and a 1200 TC fabric”, continues Affifi, “but the weight Compared to the short, frayed, abused cotton strands of the sheet set is a dead give away. We’ve handled a lot of bed The Rich Nile produced by factory farms in other parts of the world, Egyptian sheets sets from different suppliers and their weight is very World renowned for its softness and luxurious feel, cotton weaves into a strong, resilient, comfortable fabric. “The similar. A queen 1200 TC sheet set weighs about 8 to 9 pounds, Egyptian cotton sheets are made with Giza cotton grown on the threads that are spun with the extra long variety are very fine while a queen 300 TC sheet set weighs only 4 to 5 pounds, and Egyptian Nile delta for at least 7,000 years. The Nile River runs and have greater elasticity, and serve to make exceptional soft a queen 600 TC sheet set weighs about 6 to 7 pounds.” the entire length of Egypt and flows out into the Mediterranean bedding linen that surrenders one to its alluring touch. The “For daily use sheets, 200 to 220 TC per square inch is Sea. The ancient Nile River Delta has, since prehistoric times, strength of the fibre makes fabrics more solid and more resistant good enough,” says Gaballah, “but 300 to 400 TC per square been exceptionally rich agricultural land. Arab merchants to stress that won’t easily break down, lint or pill” adds Gaballah. inch is really in the luxury range. Bed linens with 1000 TC brought cotton cloth to Europe in as early as 800AD. All these factors have resulted in the Egyptian cotton fabrics and above (make people) feel like royalty nestled in them.” The Today, in terms of cotton production, China, the US, being softer, finer and lasting longer than any other fabric in the hotels actually save money in the long run by investing in the India, Pakistan and Brazil are the world leaders, but in terms world. Its ability to absorb liquids gives fabrics made of Egyptian high thread counts sheets that become softer and smoother with of prestige, nothing comes close to Egyptian cotton. Such a cotton deeper, brighter and more resistant colours, as well. repeated washings. reputation is not unjustified. It’s renowned for producing fibres “Thread counts are important to our customers because that are not only longer - sometimes an inch and a half long Count Your Threads they still equate high TC cottons with luxurious softness and - than any other cotton fibre grown elsewhere, but are finer To measure the level of smoothness combined with comfort,” said Susan Sternthal, buyer/manager of the County and stronger, as well. “For thousands of years - as far back as durability of the cotton, experts count the number of threads in Linen Centre, a 50-year old family run business in Doylestown, the pyramid building era or since the time of the pharaohs - a single square inch of fabric, which is called the “thread count” Pennsylvania. “However, we try to educate them about other Egyptians have slept under and worn products made of this fine (TC), a term that Egyptian stores are surprisingly unfamiliar important factors to consider besides thread count, like the cotton” says Ayman Gaballah, Managing Director of the Royal with. The reason is that the higher thread count Egyptian cotton weave and the finishing, so they understand exactly what the Egyptian Cotton store in Alexandria, Egypt. The Nile Delta was sheets are typically produced in other countries and not in Egypt. benefits are, what they’re paying for, and why.” an excellent place to develop cotton plantations as Egypt has The US and the UK are Egypt’s biggest cotton customers. The a moderate climate all year round, which is perfect for cotton. higher the thread count, the smoother, the heavier, the softer Take Care “Its processing is also unique,” indicates Chaimaa Afifi and more durable the fabric becomes. It even feels cool to touch. Outlasting other cotton bed linen, which are generally part of the Patco Trading Co., one of the largest Egyptian cotton “Since with higher thread counts Egyptian cotton easily lends polyester, the sheets from the land of pharaohs may become an exporters in Egypt. “All weeding is done by hand and fertilisers itself to being shaped and beautifully transformed into bedding heirloom, if treated with a little extra care. When first purchased, are primarily organic nitrates and phosphates. No chemical of all kinds than with other more inferior bed linen, most world the cotton sheets may feel a bit stiff but, after a few washes, one pesticide or defoliants are used which guarantees the highest class hotels and resorts boast about offering their guests Egyptian starts to feel the difference. Remember to take care of your top levels of purity” says Afifi. In addition, hand picking puts no cotton sheets and pillows of more than 1200 TC which lends quality Egyptian sheets, as they will last as long for you as they stress on the fibers - as opposed to mechanical picking - leaving a heavenly soft feeling against the skin” says El Haj Yousef of did for Cleopatra. The Race for Gold China or India..? By Aung Ko Ko Chit

gold prices, along with the strength or weakness of the US economy. A report from the World Gold Council said that, in 2013, Chinese consumers purchased nearly 798 metric tonnes, whilst Indian consumer figures dropped to 715.7 metric tonnes. This was attributed to the Indian government’s increase on import taxes and the introduction of an import curb. - plus, n 2012, India’s consumers were buying more gold - metric tonnes. This made China the world’s top gold consumer Indian gold importers now have to re-export 20 percent of the jewellery, coins and bars - as they could get their hands on, for the period. gold they bring in. even though record domestic prices were being hit because It’s expected that China’s demand for gold, prompted by In the third quarter of 2013, Chinese demand for gold Iof the rupee’s value at the time, as well as the import curb. a change in import regulations and government policy, will coins and bars was 12 percent higher than the previous year at A different story has emerged in 2013, as figures show a continue its rise well into 2014. Predictions have estimated it 47.9 metric tonnes. At the same time, China’s consumption of huge slump in consumption to 148 metric tonnes from July to could rise as high as 1,000 metric tonnes for the year. jewellery rose 29 percent in the third quarter to 163.8 million September, a drop of 32 percent from the same period of the Between China and India, they account for half of the metric tonnes, emphasising China’s place as the world’s largest previous year, while in China it rose by 18 percent to 209.5 world’s demand for gold and their joint purchases affect global consumer of gold. insider travel 23 www.myanmarinsider.com The Kalaw Party Bus By Brent Potter

the karaoke remained. Until at last, even the karaoke succumbed and the entire bus seemed to let out a collective sigh of despair. It was going to be a long one. Unfortunately the delay had thrown a wrench into our well planned itinerary and we would now miss our train to Kalaw. We eventually got there, though, walking into town triumphantly with the feeling of having conquered the odds On arriving, we met a rather fun French group who had hired a guide for the famous three day trek from Kalaw to Nampan in the Inle Lake area. They told me they were looking for an addition to the group, and not wanting to offend a French invitation, we put our names in the hat. So, for an all inclusive price of 40,000 kyat each, the handful of us hired a guide for the three day, 62km long trek. I had never hired a guide before, and the idea of doing so was frankly injurious to my pride. When I saw the route we were going to take on Google Maps, I second guessed my decision even more. Q: How hard could it be? A: Very hard! Not because we were scaling the face of white capped mountains or crossing crevasses with ladders and ropes, but because there are no marked trails. There was not one trail, or two trails, or ten. In fact, every day we probably got on and off 15 different trails; I completely lost the small sense of direction I had in the first 10 minutes (not an unusual occurrence). Anyone who has ridden a bus in This all sounded good a fine until a wheel jolting the aisle squatting passengers into a The trek itself was marvelous; we Myanmar knows that busses here don’t run on the bus fell off at 2am, leaving everyone heaping pile towards the front of the bus. wandered around the back country of on diesel, an engine, or even wheels; they run stranded for 4 hours, including those poor The bus stopped, the lights turned on, Myanmar’s highlands, which offer sweeping on nonstop, eardrum shattering karaoke. The souls who were squatting on plastic stools the karaoke remained blaring, and the engine vistas over open farm land dotted with cows air conditioning may not work, the tires may in the centre aisle for the duration of the remained running. The running of the engine and gleaming stupas in the distant hills. The be bald, the paint job a dubious affair, and breakdown, squeezed between bags of rice and was a promising sign; I whispered to my French first night was spent in a villager’s house and the doors not closed, but the karaoke and farm produce. companion, “I think it’ll be quick, they kept the second at a monastery - both apparently in the speaker system appear to be meticulously The bus ride had started out as promising the engine running.” the middle of nowhere. A cook went ahead of maintained. as a bus ride could, all things considered. The Thirty minutes later, the engine turned us, concocting superb cuisine in advance of our It was a rather harrowing overland trip VIP express bus we were promised turned out off, but the lights remained on along with arrival which we ate outside, stuffing ourselves from Yangon to Kalaw. Sure, we could fly, to be a less pimped out ride than pictured on the karaoke, which I thought was beginning by candlelight. but we wanted to see the countryside and the ticket - but it had air conditioning and we to resemble the sound of a hundred wailing Having completed the trek, I would say experience the sights and smells involved with weren’t on a strict schedule, so it was no big babies. This time my French companion said, the trekking experience is one of the best, travelling “local-style”. We had even decided deal. “I sink is OK, if it was really bad, they turn although if you’re traveling to Kalaw by bus, you to take on the challenge of taking one of We were cruising along merrily enough off light.” may want to consider taking one which pays as Myanmar’s scenic train rides from Thazi to at 2am, trying to ignore the nonstop karaoke, Then the lights turned off, but as much attention to its wheel maintenance as it Kalaw. until a sonic “BAM!” threw everyone forward, though it was the very bastion of hope itself, does to its karaoke system. insider business 24 www.myanmarinsider.com

spread across the country. While the bulk of the violence has taken place in western Rakhine State, it has been perceived by many as an attack on the Buddhist identity of the country, Myanmar Telecoms leading to a fairly widespread anti-Muslim sentiment. Coming from and being backed by a Muslim country By Isaac Malone - particularly as part of the fear is of Muslims taking over the economy and driving out Buddhist businesses - some prominent members of society have called on people to boycott Ooredoo products. Additionally, the Myanmar Insider has spoken to some mobile phone shops in Yangon who are wary about stocking Ooredoo products due to their connections with the Qatari government. While Ooredoo has not publicly addressed the issue, it is in the process of working hard to ensure that the brand is seen in a positive way. In recent months, Ooredoo has been on a charm offensive, sponsoring a number of civil society events in an attempt to win over the public’s trust, with many more announcements expected soon. It remains to be seen if they can do enough to turn public opinion enough so that it can compete on a level playing field with Telenor. Telenor, however, might not be its only competitor. Recent reports have suggested that the two domestic telecommunication companies - state-run Myanmar Posts and Telecommunciations (MPT) and Yadanapon Teleport - are courting international companies to implement a joint venture to allow them to compete with the two new players in the market. Until now, MPT has been the sole operator in Myanmar, but has shown that, on its own at least, it will struggle to compete with companies coming in with experience on the international stage. If, however, it can team up with international companies that have experience in building networks, then the sector could become more competitive than many expected. Companies thought to have expressed an interest in joining with MPT include Vodafone, Singtel and Orange. Today, a SIM card in Myanmar fetches upwards of $150, even on the black market. That is a significant drop from years ago, when they could cost as much as $1,000. New mobile phone network operators in the country should go a long way to greatly improving the country’s economic performance, as well as access to information for many of its citizens, but it remains to be seen how long it will take before this becomes truly nationwide as the government has promised. s Myanmar makes its transformation from international Of Myanmar’s estimated population of 60 million, less pariah to the new darling of Southeast Asia, the than 10 percent have access to a mobile phone. Compare that international business community is keeping a keen to other countries in the region - Indonesia has close to 100 Aeye on the country’s government. For five decades, the country percent and Thailand 110 percent - and it gives you some idea was ruled by an oppressive military and, as the country makes of the growth potential in the telecoms market in Myanmar. tentative moves towards actual democracy, international Since the bid announcement, however, optimism has observers want to ensure that the reforms that began taking waned. While the new Telecommunications Law was passed place in 2011 are genuine. in October, at the time of print the licenses had not yet One of the most high profile tests in 2013 came when the been issued to the successful bidders - thought to be due to Ministry of Telecoms and Communications announced the two minor disagreements over certain aspects of the new bill - successful international companies were to be granted telecoms and the ministry has to ensure that it does not let the good licenses alongside two local operators. reputation it has built for itself begin to slip as the wait for live Almost 100 expressions of interest were submitted from telecommunications continues. companies all over the world, before that figure was cut to When the winners were announced, it was promised that 22, then 12 in April. On June 27th, following an extensive operations would be live within nine months - meaning that by vetting process, the two winners were announced as Norway’s March both companies should be able to roll out their services Telenor and Ooredoo of Qatar, with a joint venture between - and while that target is still not impossible, with the licenses Japan’s Marubeni and France Telecom selected as the reserve still not granted and little progress taking place on the surface, choice should one of the license grantees be unable to fulfill its observers are skeptical as to whether that deadline will be met. commitments. There are other issues for Ooredoo and Telenor to deal Even the companies and consortiums that were with besides the lack of clarity on laws and licenses. Land prices, unsuccessful at the bid stage spoke promisingly about how free human resource problems and a lack of infrastructure are issues and fair the whole process had been. Clearly, it was a test that for all international companies coming into the country to the government passed. consider, but Ooredoo and Telenor must add the building of Telenor’s inclusion was generally expected. The company, towers in hard to reach places to that list. partly-owned by the Norwegian government, already has a strong Part of the remit for successful companies was to ensure presence in Southeast Asia as a market leader in neighbouring almost 100 percent (as well as truly nationwide) phone coverage Bangladesh and with operations in Malaysia and Thailand. within six years, but as parts of the country, particularly in Ooredoo, however, was less expected and surprised even the the north and the west, continue to be hit by ethnic tension most well informed analysts. Despite early promises of investing and violence, it remains to be seen whether the operators can an incredible $15M in the country over the 15-year license period, construct their towers in these areas. many expected either Singtel or Digicel, the latter of which that had Ooredoo, too, has its own set of unique issues to contend been on a particularly aggressive marketing campaign, to get the nod. with. In the past year and half, Buddhist-Muslim violence has insider review 25 www.myanmarinsider.com Flamingo Bar By Mark Wayne

The sound is similar to that of London, Ibiza and parts of the US, and they are also bringing some new sounds from developing Asia. You can expect top quality tunes from the best local and international DJs and various unique themes throughout the many different nights of the week. Some nights you’ll hear the best in house/deep house/tech house and modern garage, while on other nights you’ll find big room progressive and trance pumping through the sound system. It’s not unheard of for Flamingo Bar to take you back to the old school hip-hop and garage days, but some liquid drum & bass nights can also be expected. Their resident DJs focus on building a musical identity for each night and will no doubt create an open minded crowd who will grow to trust the musical vision. While promising quality upfront Finally. A forward thinking bar that sound system and serious lighting setup, which electronic music, Flamingo Bar also has many brings a unique underground vibe and is makes for a truly unique experience. They are live band nights, a blues and jazz night and committed to promoting a cool international still undergoing renovations to enhance the the always popular disco nights. They pride sound to an eccentric mixed crowd. An overall customer experience; large television touch of the familiar from home for the expats themselves on hosting forward thinking parties intimate venue full of character (with a screens that display cool graphics, even more and a lot of new for the locals, creating the with exceptional service, each and every night, slight industrial feel to it), it’s similar to the improvements to the decor and a bigger bar perfect night out for one and all. In terms as well as a very unique Yangon experience. underground warehouse venues in London. area are all being implemented at the time of of menu price, Flamingo Bar is extremely They believe in their music policy and they They try to keep the industrial feel and have this writing. competitive and the bar/club is open 7 nights encourage dancing, so go prepared! added some new decor to liven it up even The aim is to create a real focus on the a week starting at 9:30pm till late. It’s centrally “Dont follow the crowd - follow the more. The club already boasts an impressive music and entertainment aspects, bringing a located with easy access and lots of parking. underground!”

MyanMar InsIder Exciting Career Opportunities Staff Writers: The Myanmar Insider To apply, send your CV and covering Do you want a challenging is an English language publication. application letter to: and rewarding career in the Writers must have three years or more The Myanmar Insider Publishing industry? high level working experience in the 15-B, Dharma Zedi Road print media industry, and be able to Dagon Township Yangon conduct in depth interviews with senior Or email to: [email protected] The Myanmar Insider is the first truly players, provide accurate and detailed international standard English language investigative articles on local issues and journal to enter the marketplace. be highly knowledgeable and aware of Utilising our 20-years of top class current situations in Myanmar. international experience around Asia, we will soon become the country’s leading Freelance Contributors: Candidates publication and want the best people to must have published articles in English join in our success. (for print or online media) for at least We are inviting applications from both one year and be able to provide general Myanmar nationals and expat residents. newsworthy (not time sensitive) articles, reviews and news of Yangon happenings Advertising: Senior Marketing and lifestyle. Professionals who have at least two years successful sales experience, with good Administration: We need a dedicated industry contacts and their own client administration and research intern to database. Must be highly motivated and evolve into a senior position within the possess a strong desire to succeed. company. insider luxury 26 www.myanmarinsider.com Five Of The Finest - Luxury Bags By Mae Anacay

ike most things in life, exclusivity leads to desirability. If what you want is not immediately available, then the desire L for the object intensifies until you just need to have it. Such is the case with beautiful and elegant luxury bags. Most ladies, if not all, are rather fond of bags. Whether it’s something casual like the drawstring Petit Noé NM by Louis Vuitton or the much-coveted Hermés Birkin, a woman’s outfit is seldom complete without a stylish accessory in which to put her things. Here are my picks for the favourite luxury bags of our time. 1

1. Louis Vuitton Speedy Bag 2. Chanel 2.55 Flap Bag 3. Hermés Birkin 4. Gucci Jackie Bag LV Speedy bags are perhaps among the most Available in three sizes, the Chanel 2.55 is What list of luxury bags would be complete As the 2.55 is Chanel’s iconic bag line, the popular luxury bags that we’ve seen. The Speedy considered to be the most classic of all luxury without the Hermés Birkin? The Birkin is perhaps Gucci Jackie bag is the “It” bag from the Gucci is made of the classic LV monogrammed canvas bags. Named after its initial release in February the most coveted luxury bag of all time, with house. Inspired by the late Jacqueline Kennedy and calf skin and is considered to be among the of 1955, the bag continues to be the most iconic its seemingly endless waiting list that has bag Onassis, the Jackie is sophisticated, elegant, and sturdiest, most durable “It” bag ever made. The to date - so much so that a large number of aficionados waiting for years just to get their exquisitely crafted. This traditional beauty is material is “lightweight, supple, strong and sturdy. counterfeit versions of this item continue to hands on one. The Birkin is synonymous with coupled with vibrant colours and the renowned Completely waterproof, it is highly resistant to flood the market to this very day. The 2.55 has an success and style. There are only five Birkins Gucci craftsmanship, making it one of the best surface scratches,” making it perfect for those on interesting history; it was inspired by the convent released each week from the Hermés hub in bags on the market today. the go. What’s more, the Speedy comes in four in which designer Coco Chanel grew up in. Paris, which only adds to its exclusivity. In fact, sizes, ensuring that the ladies will definitely find it is almost always impossible to go to a Hermés a bag that is the perfect size for them. boutique and see a Birkin on display. 5. Prada Saffiano Cuir Large Double Zip Tote Bag Saffiano leather is known throughout the fashion world as high resistant, easy to clean treated material. The indications on the leather are attributed to Mario Prada. That being said, it makes sense that Prada carries a line of this exquisitely durable material. The Saffiano Cuir Large Double Zip tote bag features tubular tote handles, Saffiano cuir leather with golden hardware and an adjustable shoulder strap. In a word, it’s “gorgeous”, particularly the white ensemble that makes the metal logo pop; it is an unconventionally beautiful bag. Of course, there are other luxury brands that 2 were not featured in this review, but if you’re looking for a classy and timeless luxury bag, look no further than Prada, Louis Vuitton, Chanel, Hermés, and Gucci. These bags are guaranteed to be a hit when you take it with you for the next 3 Lady’s Night on the town. 4 5 insider BUSINESS 27 www.myanmarinsider.com

throughout these regions. Digicel also sponsors Progress For Ooredoo the West Indies cricket team. By Myint Thandar Kyan About YSH Finance Limited igicel Asian Holdings, comprised of network to cover a quarter of the country within closely with the Government, authorities, YSH Finance Ltd is part of the SPA the Digicel Group, the First Myanmar a year, and three quarters within five years. Given telecommunications operators and other local Myanmar Group, one of the leading business D Investment Co. Ltd and Yoma Strategic that this is a mostly green field project in an companies." groups in Myanmar, with companies active in Holdings Ltd, has signed an agreement with undeveloped country, it makes tremendous sense key business sectors, including financial services, Ooredoo Myanmar to develop, construct and for both telecommunication players, and for the About Digicel real estate development, automobile distribution, lease telecommunications towers in Myanmar. local telecommunication companies, as well, to Digicel Group Limited is a leading global agriculture, manufacturing, services, retail and We understand from management sources that outsource the build out and share resources to telecommunications provider with operations in travel, and tourism. detailed terms regarding ownership and capital manage costs and gain strategic synergies. 31 markets in the Caribbean, Central America YSH Finance Ltd is owned by the First outlay for the consortium are still being negotiated Commenting on the announcement, Mr. and Asia Pacific. After 12 years of operation, Myanmar Investment Co. Ltd ("FMI") and and will be announced in due time. Digicel Asian Denis O'Brien, Chairman of Digicel Group, the total worldwide investment to date stands Yoma Strategic Holdings Ltd ("Yoma Strategic"), Holdings’ company in Myanmar, Myanmar Tower said, "We are delighted to work with Ooredoo to at over US$4.5B. The company is renowned two public companies within the SPA Myanmar Company, will construct multitenancy towers help develop a high quality telecommunications for delivering best value, best service and best Group. in Myanmar and aims to work with multiple network across the Republic of the Union of network. In 1992, Mr. Pun set up FMI, a public telecommunications operating companies, Myanmar, contribute to the growth of the Digicel runs a host of community-based company in Myanmar with over 4,500 including Ooredoo’s, to facilitate its commitment Myanmar economy and benefit Myanmar citizens initiatives across its markets and has set up Digicel shareholders, all of whom are Myanmar nationals. to rapidly achieving coverage across the country across all of the country's States, Regions and Foundations in Jamaica, Haiti, Papua New Employing approximately 5,000 people within after winning a coveted license. Union territories." Guinea and Trinidad and Tobago, which focus the Group, FMI is active in a broad range of In June of 2013, Myanmar authorities Mr. Serge Pun, Chairman of Yoma Strategic on educational, cultural and social developmental activities in Myanmar. awarded two telecommunications licenses to and FMI, added, "Today's announcement is programmes. In 2006, Mr. Pun led Yoma Strategic to Norway’s Telenor and Qatar’s Ooredoo. As part a significant step in the economic and social Digicel is the lead sponsor of Caribbean, a successful listing on the mainboard of the of the reported requirements, winners of the development of the Republic of the Union of Central American and Pacific sports teams Singapore Stock Exchange, which is today an tender must launch their services within nine Myanmar. We are delighted to play our part in and individuals including the world's fastest internationally publicly listed company offering months of the licence being granted and install a such development and look forward to working man, Usain Bolt, and Special Olympics teams investors direct exposure to Myanmar.

BAGAN CAPITAL

InGems, Good Cars & Realty… Company… Jeremy Kloiser-Jones, CEO, Bagan Capital

f they’ve not undertaken some prior savers to become bank depositors. The absence forward? Looking at it from a returns to asset beyond Myanmar. A new stock market is investigation, those arriving in Myanmar of savings and investment instruments, such as perspective, one needs to be fairly confident of due to open in 2015, providing access to a Iwith the intention of investing in real estate stocks, bonds and investment funds, essentially significant future cash flows to explain current range of financial assets, most likely extending or needing to rent property here are in for a narrowed the options for storing wealth to prices. But, does this mean that there is a to both government and corporate bonds. shock when they come face to face with what the purchase of real estate, precious gems or risk of a speculative bubble developing here? Meanwhile, a growing number of (non-listed) can only be described as the astronomical prices (then of high value) automobiles. Now, since We should not be too hasty in drawing that public companies in Myanmar are already that currently prevail. Without needing detailed prudence dictates diversity in the forms in conclusion, however, since there are a number starting to provide investment opportunities analysis, it is obvious that, like properties in which assets are held and in view of the fact of significant forces at work that will potentially to local citizens. Conversely, as the banking countries with higher income levels, go for that one principal source of accumulated wealth impact in both positive and negative ways on system develops and its customer base grows, far less. Let’s take a brief look at some of the was commonly precious gems, the purchase of future prices. That little in Myanmar is bought however, it is reasonable to expect that the factors that account for this situation and real estate became a favoured option (given the on credit is one distinguishing factor lending availability and take up of credit will expand contemplate the future outlook. impracticality of holding too much wealth in support to the price level. significantly, providing increased opportunities First and foremost, it is evident that the form of automobiles), resulting in a price Like all markets where demand takes off for borrowers to enter the real estate market, Myanmar had a high base level of real estate level for real property above that in economies and supply only arrives at a lag, there are exerting upward pressure on property prices. prices (vis a vis the level of Gross Domestic of a similar level. more properties coming down the line - We do not claim to know precisely where prices Product, or GDP) well before the political and Growing numbers of people in one only need look at the numerous “under will trend but, while the downside risk may economic reforms of recent times. This can be contemporary Myanmar have caught the construction” locations in Yangon. All else be relatively low, we would argue that those explained by the stringent domestic constraints real estate “bug” and will tell you that such being equal, a larger supply of properties contemplating purchasing realty in Myanmar on the transfer of funds out of the country, investments are “safe as houses” because prices should take some pressure off prices, although today should sharpen their pencils and assess compounded by the imposition of sanctions are always heading north. Yet, there have been it may be a few years before the impact is felt. the numbers carefully. by foreign governments, and the scant range of reports of some successful and wealthy citizens Further, downward pressure on property prices In the meantime, there is currently a serious options available to Myanmar citizens for saving deciding to hedge their exposure by taking is likely to emanate from the emergence of a shortage of good quality properties in Myanmar, and investing. Historically, the formal banking some cash off the table locally and investing in greater variety of avenues for investment and whether for commercial or residential use… sector has represented only a small part of the real estate abroad. As usual, different market for storing wealth within the country and so, folks, to be here means getting over the economy, with the troubles of that sector in the participants have different expectations. What a generally more sympathetic environment sticker shock. Oh, and hold onto your hats early 2000s further eroding the inclination of will realty prices in Myanmar look like going for moving funds abroad and for investing when rental renewals come around! insider business 28 www.myanmarinsider.com Sixteen Winners Selected For Onshore Blocks By Naw Thee Zun

Company Registrations By Mark Wayne

yanmar authorities have indicated that they will speed Mup company registration by cancelling the “temporary permit” issuance. Up to now, companies in he Myanmar Ministry of Energy has • Can a contractor be awarded more Second Bidding Round. The Round offered Myanmar are setup in two stages. In announced which companies have than one block? Clearly, yes. It seems that onshore blocks for Petroleum Operations to the first stage, the company is granted Tbeen awarded contracts for its tender the Ministry looks at the bids that came in on a be conducted on a production sharing basis. a temporary permit. Once the required of onshore oil and gas blocks. block per block basis. Whether one contractor A total of 18 onshore areas were offered, 15 portion of the company’s minimum Petroleum Brunei, the Italian ENI, and ends up with more than one block is simply Production Sharing Contracts (PSC) and capital is remitted, a final certificate is the Canadian (but Singapore based) Pacific a matter of that contractor having the better 3 Improved Petroleum Recovery Contracts issued. Hunt Energy Corporation, are among the bid for each one of those blocks. (IPR). Only 2 blocks from the 18 were not The Directorate of Company and winners. PTTEP, Petronas and MPRL, which • Existing players, such as PTTEP, awarded, notably PSC M and IOR 3, due to Investment Administration (DICA), all have interests in Myanmar, were awarded Petronas and MPRL, have an edge over the a lack of bids. which oversees company registration, will blocks, as well. Petronas, ENI, MPRL and newcomers. This is not a matter of policy from The Ministry plans to invite sealed bids now abolish the first stage. Companies Pacific Hunt Energy were each awarded 2 the Ministry. It is simply easier for contractors for the two remaining blocks, but details have will immediately receive their final blocks. The awarded companies and related that already know Myanmar to propose a more not yet emerged as to schedule. A press release documentation, which includes a blocks were announced by the Ministry of aggressive bid. They are not troubled by as by the MOE stated that “the tender evaluation Permit to Trade and a Certificate of Energy (MOE) on the 10th October, 2013, much uncertainty as newcomers are. We may team led by the deputy minister scrutinised Incorporation. The move is aimed at and the list was published on the Ministry’s see this again with the offshore round. and gave a score to final proposals according reducing the administrative burden website. There are a few interesting takeaways In January of 2013, the Myanmar Ministry to the selection criteria, such as exploration connected with company establishment from the onshore awards, which can teach of Energy (MOE), on behalf of the Myanmar period, work schedules and expenses to be for both authorities and investors. us something about the upcoming offshore Government, announced the invitation for expended, production share ratios, experience round: sealed bids for Myanmar Onshore Blocks of company, and signature bonus”. Myanmar Prepares Draft Law On formulate policy, prepares tariffs, advise the Law and have the right to expand and maintain By Shwe Sin Hnin Ministry of Electric Power (MOEP), set standards their facilities. The Draft Law also provides that Electricity and forms inspection bodies. The ERC will the authorities can build transmission lines in include nongovernment employees. accordance with existing laws. he Myanmar Government has Electricity Law of 1984, which was amended Under the Draft Law, states and regions can Importers of electrical equipment must released an advance draft of the new in 1990. issue permits for small and medium power plants. follow the standards and guidance of the rules T Electricity Law (the “Draft Law”), a The Draft Law divides projects into “small” In cases where these plants are not connected which will be issued under the Draft Law. comprehensive piece of legislation covering (up to 10MW), “medium” (between 10MW to to the national grid, the Union Government Furthermore, the Draft Law restates and licensing, a new regulatory commission, 30MW) and “large” (upwards of 30MW). Ministry is not the primary authority involved. modernises some of the existing law’s provisions standards, inspection, tariffs and restrictions. A new body, the Electricity Regulatory The authorities have a legal right to use land on safety and inspection from the original 1984 The Draft Law is intended to replace the Commission (ERC), has been created to for the purpose of power plants under the Draft Electricity Law. insider BUSINESS 29 www.myanmarinsider.com MIC Approved Investments in the First Nine Months of Year 2013 Name of Company Industry Oh, my God... EWHA KNIT Co. Ltd Clothing Tokyo In Myanmar Co. Ltd Clothing I forgot I had Toyo-Thai Corporation Public Co. Ltd Power Generation Wedtex Fashion (Myanmar) Co. Ltd Clothing children PTTEP South Asia Ltd Oil and Gas Myanmar D & Y Textile Co. Ltd Clothing Linda Fashion (Myanmar) Co. Ltd Clothing Chamzon Apparel Manufacturing Co. Ltd Clothing Myanmar Hair Co. Ltd Hair Products AMG Factory Ltd Clothing Myanmar Distillery Co. Ltd & Beer Chang Int'l F&B Green Tech Industries Co. Ltd Manufacturing Suzuki (Myanmar) Motor Co. Ltd Manufacturing Atelier E & M International Co. Ltd Manufacturing British American Tobacco Myanmar Ltd Manufacturing Cycle & Carriage Automobile Myanmar Co. Ltd Servicing and Maintenance Myanmar Carlsberg Co. Ltd F&B Khaing Khaing Sang Da Group Ltd Manufacturing Pattaya Myanmar Co. Ltd Clothing Stada Myanmar Joint Venture Co. Ltd Manufacturing DIR - ACE Technology Ltd. IT & Software Myanmar Supply Chain and Marketing Services Co. Ltd F&B Myanmar Kun Yun Plate Making Co. Ltd Manufacturing Greatmen (Myanmar) Co. Ltd Clothing Bellmart (Myanmar) Co. Ltd Manufacturing Myanmar S.M.C Garment Ltd Clothing Greet Glowing Investment Co. Ltd Clothing SUBSCRIBE E & E Magnetic Products (Myanmar) Ltd Manufacturing Concorde Commodities Pte Ltd Manufacturing Straits Greenfield Ltd (Sedona Hotel Yangon) Hotel & Service Apartments UCR (Myanmar) Co. Ltd F&B Tristate Myanmar Co. Ltd Clothing NOW APB Alliance Brewery Co. Ltd F&B Prime Metal Co. Ltd Manufacturing Myanmar Inno International Ltd Clothing General Enterprise Garment Co. Ltd Clothing Force Co. Ltd Manufacturing Hon Chuan (Myanmar) Co. Ltd Manufacturing THE MYANMAR INSIDER Frontier Company Ltd IT & Software IS THE COUNTRY’S PREMIERE MONTHLY JOURNAL DELIVERING YOU TOP Haker Enterprise (Myanmar) Co. Ltd Clothing CLASS BUSINESS AND TOPICAL NEWS BOTH IN PRINT AND 0NLINE Ta Han Food Industrial Co. Ltd F&B Myanmar Parfun Co. Ltd Clothing TO SUBSCRIBE Postage + Yuan Rong Shoes Co. Ltd Clothing 6 Issues 6,800 Kyats Packing Myanmar Cruises Co. Ltd River Cruising Services 12 Issues 14,000 Kyats outside Greenply Industries (Myanmar) Pvt Ltd (India) Manufacturing Yangon not included Mokan International Co. Ltd Hotel & Service Apartments www.myanmarinsider.com Myanmar Solamoda Garments Co. Ltd Clothing Myanmar Sein Pann Garment Manufacturing Co. Ltd Clothing Designtime Myanmar Co. Ltd Manufacturing Sinobest Jewelry Co. Ltd Clothing Nexstar Garment Manufacturing Co. Ltd Clothing AMG Factory Co. Ltd Clothing Shwe Zabar Co. Ltd Societe Industrielle Rice Milling Agricole Et Commerciaal D' Outre Mer (SIACOM) Agriculture Big Tree Co. Ltd Hotel & Service Apartments Logitem Myanmar Co. Ltd Car Rental & Transport Dong Long (Myanmar) Garment Co. Ltd Clothing Hung Kiu (Myanmar) Garment Manufacturing Ltd Clothing Interidge Company Ltd Clothing Hong Tex Co. Ltd Clothing South Bay Manufacturing Co. Ltd Clothing Daewoo Amara Co. Ltd Hotel & Service Apartments Myanmar POSCO C & C Co. Ltd Manufacturing Sanctuary Retreats Myanmar Ltd River Cruising Services EMC Manufacturing Ltd Manufacturing Bogart Lingerie (Yangon) Ltd Project II Clothing Supreme Asia Garment Factory Ltd Clothing EXE Design (Myanmar) Co. Ltd Hotel & Service Apartments Hope One Co. Ltd Clothing Packraft Myanmar Co. Ltd Manufacturing Tan Chong Motor (Myanmar) Co. Ltd Manufacturing APM Auto Components Myanmar Co. Ltd Manufacturing Shwe Taung Hyday Development Co. Ltd Construction CM Japan Agri Myanmar Co. Ltd Agriculture B&N Garment (Myanmar) Co. Ltd Clothing Melody Global Co. Ltd Manufacturing SDI Manufacturing Co. Ltd Clothing Lita Myanmar Co. Ltd Clothing TOA Paint (Myanmar) Co. Ltd Manufacturing Sunjin Myanmar Co. Ltd Manufacturing Polysack Myanmar Co. Ltd Manufacturing ASMO Myanmar Co. Ltd Manufacturing Sun Apparel Myanmar Co. Ltd Clothing Young Co. Ltd Clothing Hydrodynamic Industrial (Myanmar) Co. Ltd Clothing UPP Power (Myanmar) Ltd Power Generation J & M Steel Solutions Co. Ltd Manufacturing insider TRAVEL 30 www.myanmarinsider.com

VIETNAM TODAY By John G. Newark, Marketing Director, Flight Travel

ietnam is now firmly on the world more. A day or two is probably sufficient to see visiting the famous Cu Chi Tunnels, an incredible and white sandy beaches, the warm climate and stage, but only since the early 1990s the major attractions in Saigon, which really underground network of tunnels on three different spectacular location make this an ideal tourist Vdid travellers start arriving. should include the Old Saigon Post Office, with levels, constructed by the Vietnamese resistance destination. Nha Trang Bay is considered one Brilliant green rice fields stretch to the its ornate façade and splendid interior, and the fighters during their struggle for independence. of the most beautiful bays in the world, with sun, bustling city streets where grand colonial iconic Notre Dame Cathedral. Nearby is the A trip to the Mekong Delta, either for one its clear waters and abundant coral reefs around buildings rub shoulders with gleaming new luxury former Presidential Palace. day or longer, is not to be missed. It will provide the outlying islands a haven for divers of all skill hotels are everywhere, glorious mountain scenery For those with an interest in passed conflicts, an unforgettable experience. Encompassing some levels. There are daily flights from Saigon that with beautiful ethnic minority people, delicious a visit to the War Remnants Museum will give 39,000 km2 this vast water world of paddy fields, take less than one hour. However, the transfer cuisine, bustling markets, quiet temples and you a gruesome insight to the horrors of war orchards and fish farms is a labyrinth of canals from arrival at Cam Ranh Airport into the city pagodas, and deserted beaches. This is Vietnam (not for the feint hearted!). threading their way between lush green islets and can take as long as 30 minutes. Nha Trang is a today. Stroll down Dong Khoi Street to the Opera emerging into wide tumultuous rivers. very laid back city, and life mostly revolves around Ho Chi Minh City (Saigon) is the House and the colonial style Continental Hotel Discover the delta by boat and visit one of the beach. There are watersport centres, diving commercial powerhouse of the country, with (as featured in the movie of Graham Greene`s the early morning floating markets at which you and snorkeling facilities and good restaurants. shiny new shopping malls, banks, international “The Quiet American”. On the way, pass by can sample the local produce, coconut candy, Cycling is the best way to see the countryside, hotels, old markets, museums and a China town. the magnificent classical City Hall, all of which a variety of exotic fresh fruit and the local rice as is often the case. Café life plays a major part in Vietnamese culture, are easily accessible on foot. Further out of the wine. You can learn to understand the different During the months of March and April, and you will always find people enjoying coffee city centre is the bustling China Town, known beliefs among the Vietnamese, Chinese, Khmer when the weather is very hot during the build usually with sweet condensed milk and loads of as Cholon. Here you will see Binh Tay Market, and Cham people living in the region and even up to the rainy season, the French Colonialists ice (ca phe sua da) or black coffee with ice (ca the largest market in Vietnam, and the Thien home stay in a local house and share the daily used to move to Dalat, a cool retreat in the phe den). There is even a new Starbucks! The Hau Temple, with coils of incense creating a life of your hosts. central highlands. Here they developed a new Saigonese love to snack, and there are plenty of timeless atmosphere. Travelling away from the frantic city of town that has now become a big tourist spot. opportunities. The signature dish of Vietnam is Before leaving Saigon there are a number Saigon to the coastal city of Nha Trang will The journey by road from Nha Trang to Dalat Pho; a noodle based soup with either, chicken of interesting places to visit. One is the unique provide a complete contrast. This picturesque takes about 4 hours, and snakes its way over mist or beef. The dish is a cheap, healthy, nutritious Cao Dai Great Temple where the religious city in Central Vietnam on the shores of the shrouded mountains and through deep valleys. meal with fresh herbs, onions, chilies, ginger, sects practice Caodaiism and come together to East Sea is endowed with peace and quite all It is without doubt one of the most spectacular cinnamon, bean sprouts, fresh mint and much worship in harmony. This can be done while year round. Surrounded by islands, mountains overland journeys in Vietnam. The town is set insider TRAVEL 31 www.myanmarinsider.com amongst lakes and pine forests, making it ideal for both mountain bike enthusiasts and hikers, as well as nature lovers. From Saigon fly north to Danang, the third most “important” city in the country, and experience the ancient Cham civilisation. The city has the largest collection of Cham artifacts in the country, but as Danang does not offer much in the way of sites, most visitors travel on to the ancient port town of Hoi An. Dating back to the 15th century, Hoi An`s eclectic mix of architectural styles stand testament to its illustrious past as a flourishing trading port. The town was, at various times, home to the Champa people, as well as Japanese, Dutch and Indian traders, who all brought their own individual cultures, which are reflected in the town’s rich heritage. Nowadays, Hoi An is a Mecca for tourists, who buy the colourful handmade lanterns, ceramics and textiles. Of boulevards and large lakes. Hanoi demands that rural landscape. There is the opportunity to the shores of the long eastern coastal region particular interest are the 400-year old Japanese you spend time to savour and enjoy its 1,000- cycle along the narrow paths and visit some extending some 3,260km north to south. bridge with adjoining Buddhist pagoda, the year old history. Home to the revered Ho Chi of the hamlets in the valley. For the curious merchant’s houses, and the market. There is an Minh, a visit to the Ho Chi Minh Mausoleum is and energetic, a visit to the Yen Tu Pagoda will Climate interesting Vietnamese cooking school in Hoi essential, as well as a visit to Uncle Ho’s residence. test your stamina as you climb the seemingly The seasons vary from the north to the An, known as “The Red Bridge Cooking School”, Then, on to the lotus shaped One Pillar Pagoda, countless steps. south. Generally, the dry season in the north for those interested in discovering the secrets resting on a single stone pillar rising from a small There is an overnight train that leaves Hanoi lasts from November to April and during this of the local cuisine. Take the time to visit My lake, and to the Temple of Literature, Vietnam’s for Lao Cai, arriving at 6:30am. Upon arrival, time the weather can be quite cold and damp. Son, the former capital of the Champa people. first University. The “Old Quarter” of the city overland transport will take you to the misty A good time to visit is between May and Scattered throughout the lush green valley are provides an insight into the ancient trading hilltop town of Sapa, in the far northwest near the October. In the south, the rainy season starts many ancient towers dating from the 7th to the practices in Hanoi, and retains the old street plan Chinese border. Sapa hangs like a jewel between around May and can extend to November 13th centuries. and architecture. The streets are named after each the sky and the earth, overlooking the deep valleys (and sometimes into December). However, The coastal route from Hoi An to Hue is trade, such as silk, jewellery, cobblers and coffee. A of the Hoang Lien Mountains, where cascading it doesn’t rain all the time. During these possibly one of the most scenic in the country. tour through this fascinating area should be taken rice terraces cling to precipitous hillsides. Here you months the land becomes fresh and bright Just beyond Danang the road climbs over the Hai by cyclo, which is a three wheeled cycle rickshaw. can climb Mount Fan Si Pan, the highest peak in with the rice fields turning emerald green. Van Pass, or Pass of Ocean Clouds. This is the At the end of the day, a visit to the Thang Long Southeast Asia, follow the paths of the local people The warm sunny days return in December highest pass in Vietnam and is also geographical Water Puppet show is a must. Water puppetry is beside the mountain streams, or hire a motorbike and usually last until the onset of the rains and physical division between north and south. an ancient Vietnamese art form dating back to and explore the region in your own time. in May. Finally, the road enters the ancient capital of the 11th century depicting folk tales. This is home to the colourful ethnic minorities Vietnam, Hue. Take a break from city life and travel to of Black H’mong, Red Dzao, Thai, Yeo, Tay People Hue was once the capital of the Nguyen Halong Bay, with its 3,000 spectacular limestone and Flower H’mong. Visit the local markets Approximately 85 percent of the Dynasty from 1802 to 1945, and the numerous islands soaring dramatically from the emerald of Bac Ha, Mung Khuong and Cao Son and population are Viet Kinh. The remainder architectural monuments reflect this rich green waters of the bay. This World Heritage admire the decorative costumes of the friendly are ethnic Chinese, Chams, or members of the cultural era that includes the impressive Citadel, site is one of Vietnam’s gems. Stay for the day or ethnic people. There are few words that can fully ethnic minority people who live in the central recognised as a World Heritage site by UNESCO. overnight on a traditional wooden junk, exploring describe the breathtaking beauty of this region. highlands and in the mountainous northern This tranquil city lies on the banks of the Song caves and the small isolated beaches. Relax on It is said that Sapa has four seasons in one day, regions close to the border with China. Huong river, also known as the “Perfume River”. the sundeck, swim or kayak. The tranquility of and I can vouch for that. A word of caution: Sapa A boat trip along the river will unveil many the bay will leave you spellbound. has now developed into a highly popular tourist Language historical treasures, including the Thien Mu A two hour drive from Hanoi will bring you destination and, as such, the ethnic people are Vietnamese is a tonal language that uses pagoda (the official symbol of Hue) and the to Hoa Lu; the ancient capital and economic, now “business savvy” and tend to follow tourists the Roman alphabet, and can be quite difficult tombs of Minh Mang, Tu Duc and Khai Dinh. political and cultural centre of the first centralised everywhere with their wares. An unfortunate but for foreigners to master. Nowadays, English Hue is renowned for its excellent cuisine, feudal state in Vietnam (from 968 to 1010BCE). inevitable side effect of mass tourism! is widely understood and used, especially in often spicy but fragrant with an assortment of From here it is a short drive to the Van Long tourist areas and hotels. dipping sauces. For a flavour of Hue cooking, ecotourism area; an area of outstanding natural Useful Information On Vietnam try Ban Xeo, a delicious hot pancake filled with beauty, surrounded by impressive limestone Geography Religion shrimp, pork slices, bean sprouts and herbs. It is mountains. A two hour boat trip on a local Vietnam is bordered by China to the Buddhism is the most common religion in accompanied with a fish sauce and carrot dipping sampan though the rice paddies to the famous north, Laos and Cambodia to the west and Vietnam. About 8 percent of the population sauce. Also, Banh Beo is a small steamed rice Tam Coc Caves affords a glimpse into the pristine the East Sea, well, to the east, which washes are Catholic. pancake with fresh savory toppings. Bun Bo Hue is a Hue style beef vermicelli dish. There are many variations on this recipe and all are delicious. There are some excellent cooking schools in the city offering classes to aspiring chefs. It is possible to spend time living and working with the local farmers in nearby Tra Que Vegetable Village. If time allows, drive north through the lush countryside to Bach Ma National Park. Stretching from the East Sea to the Laos border, this vast tract of wilderness is teeming with wildlife. If you can reach the summit of Back Ma Mountain, the reward will be a stunning panorama. In the far north lies the capital city of Vietnam, Hanoi, on the bank of the Hong River (Red River). To reach Hanoi there are regular flights from Hue and Danang. The city exudes a quiet charm, despite the traffic, with ochre-coloured colonial buildings, tree-lined