Hans Van Baalen the EU, Brexit and a Shifting World Order

THE PREMIUM BUSINESS MAGAZINE FOR EXECUTIVES ISSUE NO 3 JAN–MAR 2019 FREE COPY EuroMatters

12 — COVER STORY hans van baalen The EU, Brexit and a shifting world order

10 — MICROECONOMY Working in a European organisation - from a Myanmar perspective 16 — SUCCESS STORY Luther gets things done in Myanmar 24 — EAR ON MARKET Why are we talking about trust? EuroMatters 3 JAN–MAR 2019

EXECUTIVE DIRECTOR & CHIEF EDITOR MESSAGE FROM EUROCHAM Filip Lauwerysen DIRECTOR OF PRODUCTION Laurenne Sautier We wish you a Happy New Year on behalf of EuroMatters! CREATIVE DIRECTOR It is our pleasure to present you the first 2019 edition of Richie Chan EuroMatters, the only premium business magazine for executives INTERNAL CONTRIBUTORS Marc de la Fouchardière in Myanmar. Kai Heymans EXTERNAL CONTRIBUTORS This issue focuses on the health sector. The feature articles Kantar TNS seek to highlight Myanmar’s expansion of hospitals and clinics, PHOTOGRAPHY growth of the medical device and pharmaceutical industries and ALDE Party Alexander Bohusch development of logistics and insurance for medical suppliers. Htoo Kyaw Htet The healthcare market is of critical importance to many European PRINTER businesses in frontier economies, including Myanmar. Across MCM the country, there is an urgent need to upgrade the healthcare Reg. No. 00876 No. 379/383, Bo Aung Kyaw Street system, in terms of both hardware and software. That entails the Kyauktada Township, Yangon, Myanmar introduction of health insurance, better medical equipment, new hospitals, more public spending, more doctors and nurses and- ADVERTISING ENQUIRIES above all - more foreign investments. +95 9 25002 0798 +95 9 45051 8085 [email protected] In addition, this edition will present you an interview with HANS VAN BAALEN, one of the most recognisable names in

PUBLISHER Europe’s vast political landscape, who is the current President of Filip Lauwerysen (02375) the Alliance of Liberals and Democrats for Europe (ALDE) Party in Brussels’ European Parliament. MR BAALEN plays an important part in the Investment Protection Agreement discussions between Myanmar and the EU. European Commissioner CECILIA MALMSTROM, who is in charge of evaluating the potential withdrawal of Myanmar’s tariff-free access to the EU European Chamber of Commerce in Myanmar market, belongs to the same party. The wide-ranging interview covers MR BAALEN’S vision of the future of European trade and 271–273, Bagayar Street geopolitics. Sanchaung township, Yangon, Myanmar

+95 9 450 582 335 Lastly, we will take you through the story of German law firm [email protected] Luther, which has been very successful in supporting European www.eurocham-myanmar.org investors in Myanmar, helping them to navigate the many eurocham.myanmar challenges in this frontier market. eurocham.myanmar EuroCham Myanmar On behalf of the EuroCham team, EuroMatters wish you and your business a successful 2019. • CO-FUNDED BY we would like to thank you for your trust European Union and we look forward to collaborating This publication has been produced with the assistance with you in 2019! of the European Union. DISCLAIMER The information and views set out in this magazine are those of the author(s) and do not necessarily reflect the official opinion of the European Union or EuroCham Filip Lauwerysen Laurenne Sautier Myanmar. Neither the European Union institutions EXECUTIVE DIRECTOR & MARKETING & COMMUNICATION and bodies nor any person acting on their behalf may be CHIEF EDITOR MANAGER We wish our readers a happy held responsible for the use which may be made of the information contained. and prosperous New Year 2019! No part of this publication can be reproduced or transmitted in any form without prior written permission from EuroCham Myanmar. The editors, employees and contributors cannot be held responsible for any errors, inaccuracies or omissions that may occur.

COVER PHOTO HANS VAN BAALEN by ALDE PARTY EuroMatters 3 JAN–MAR 2019

CONTENTS

06 SNAPSHOT 20 BUSINESS

Lifestyle of people from HEALTHCARE Dala at Blue Hour Pioneering logistics and insurance for medical supplies

08 UPDATES 22 BUSINESS Relevant news and developments in Myanmar’s 10 HEALTHCARE 18 business environment Healthcare industry seeks to fight off illicit trade, develop human capital 10 MICROECONOMY PROFILE

Working in a European 24 EAR ON MARKET organisation - from a Myanmar perspective Why are we talking about trust?

12 INTERVIEW 26 EVENTS ON REVIEW The EU, Brexit and a shifting world order EuroCham Business An interview with Hans van Baalen, Confidence Survey 2018 and President of Alliance of Liberals and Business Guides 2019 Launch and Democrats for Europe (ALDE) A recollection of our successful event 12 in Yangon 20

16 SUCCESS STORY 28 Luther gets things done in UPCOMING HIGHLIGHTS Myanmar Overview of key events in the upcoming quarter

18 BUSINESS

HEALTHCARE Modernising Myanmar’s hospitals and clinics

16 26

EuroMatters 3 JAN–MAR 2019 4 5 EuroMatters 3 JAN–MAR 2019 SNAPSHOT SNAPSHOTUPDATES

LIFESTYLE OF PEOPLE FROM DALA AT BLUE HOUR

KIDS FROM Dala swim at the riverbank in the evening. This photo was taken at the old shipwreck from which they jumped into the water during high tide.

Photo by HTOO KYAW HTET HTOOKYAWHTETTRAVEL HTOO KYAW HTET PHOTOGRAPHY

EuroMatters 3 JAN–MAR 2019 6 7 EuroMatters 3 JAN–MAR 2019 UPDATES UPDATES Majority of European firms to re-invest in Myanmar Strong growth momentum for Myanmar

THE THIRD edition of EuroCham’s companies to come and do business in Firstly, 81% of the European MYANMAR’S GROWTH growth in manufacturing, construction Notably, the opening of retail and Business Guides are now available for Myanmar are the opportunities in the companies rate Myanmar’s business momentum remains strong despite the and transport sectors driven by slowing wholesale sectors, services sector European companies and investors booming domestic market. The majority environment as “poor” or “needs broader headwinds on a global scale, investments, rising production costs liberalisation, loosening restrictions on as well as related stakeholders in of companies remain positive on their improvement”, compared to 76% in and the country is expected to reach and weakening domestic demand. foreign bank lending and continued a wide variety of industries. The expectations of operational changes 2017 and 67% in 2016. Secondly, 45% 6.6% growth by next year, the latest implementation of the Companies Act Business Guides together with the over the next three years. A larger share of the firms responded that in the World Bank report said. The national currency Kyat will drive the investment prospect. third Business Confidence Survey of European companies is planning to last 12 months the overall business depreciated 18% against the US dollar were launched last December with the reinvest in Shan State and Ayeyarwady environment “decreased” or “greatly The World Bank published its between April and October last year, Despite the steps taken, there presence of H.E. KRISTIAN SCHMIDT, Region, whereas there is a decline in decreased”, compared to 30% in bi-annual economic assessment of having an impact on inflation, which is are elevated downside risks from EU Ambassador to Myanmar and investment interest in Mandalay Region, 2017 and 18% in 2016. Thirdly, 47.3% Myanmar in December 2018. It found expected to climb to 8.8% in 2018–19 intensifying impacts of the northern U AUNG NAING OO, director general Naypyidaw and Tanintharyi Region. of firms surveyed chose to set up that while macroeconomic volatility from 5.4% in 2017–18. Rakhine crisis, such as the possible of the Directorate of Investment and its business in Myanmar as a local has intensified as Myanmar continues repeal of the Generalised Scheme of Company Administration (DICA) (see However, there was also some subsidiary, specifically in a form of a to navigate significant uncertainty and “Investors believe that the recent Preferences by the European Union page 26). dissatisfaction. Over half of the limited company. Fourthly, economic risks at home and abroad, the country slowdown in commitments may reflect and pressure from macroeconomic businesses are not happy with the nationalism in Myanmar negatively maintains relatively strong growth uncertainty in the investment climate imbalances. The annual business confidence domestic business environment. The affected 48% of the surveyed companies, momentum by global and regional related to the Rakhine crisis and survey is a highly important tool to DICA director general reaffirmed the a positive decrease of 6% in comparison standards. weak reform momentum,” the report The Bretton Wood institution argued obtain valuable market data and government’s commitment to raise with 2017. Fifthly, 37% of the surveyed highlighted. that more could be done with the fiscal has been endorsed by the European Myanmar’s ease of doing business companies in 2018 are profitable, Real GDP is projected to moderate space, driven by under execution of Commission. It aims to monitor ranking. against 41% in 2017 and 50% in 2016. to 6.2% in 2018–19 from 6.8% in In the medium-term, the the state budget. Deficit is expected to economic developments and create a Last but not least, 42% of the surveyed 2017–18. In particular, agriculture macroeconomic outlook projects a increase to 4–4.5% in next two years, more transparent business environment Similar to previous years, the key companies were negative about the growth remains strong and stable at recovery to 6.6% by 2020–21, supported from 2.7% of GDP in 2017–18. in Myanmar. By securing actual data challenges include regulatory issues, changes in the Kyat values against 1.2% and some service sub-sectors by an expected pickup in foreign and on business sentiments and concerns, lack of qualified labour force and legal the US dollar. In comparison with last like telecommunications are growing domestic investment which is catalysed EuroCham endeavours to relay the uncertainty. year, only 27% of the participants were robustly. This is offset by slowing by a number of recent policy measures. views towards the governing entities negative about that. and regulatory bodies. Among the data, there are six key sets of findings which companies should The full survey and the business guides This year’s findings show that the be aware of. are available for free on EuroCham most important reason for European website. New ministry to speed up investment process

IN AN effort to drum up foreign related procedures and licences through The ministry took over two Foreign banks permitted to lend to local companies investments into Myanmar, the a one-step centre. This, ideally, should existing departments - the Directorate government established a new ministry model on the One Stop Service Centre of Investment and Company MYANMAR’S CENTRAL bank banking services for companies and develop. The main thing is that we need to oversee investment process and in Thilawa Special Economic Zone. The Administration and Foreign Economic has liberalised the financial industry by organisations. Despite the liberalisation, to prioritise the growth of the economy foreign aid support. centre has representatives from all Relations Department - from the allowing foreign players to offer loans there are still restrictions on acceptance for the entire country.” relevant ministries and the process is finance ministry. This is the latest to companies and set their own interest of immovable properties, such as Last month, the government set straightforward and efficient, without effort by the government to jump-start rate since December 2018. land and building as collateral, and Deputy governor U BO BO NGE up the new Ministry of Investment and the need for investors to approach its economy policy. U THAUNG TUN, acceptance of fixed deposit saving and also emphasised that CBM would want Foreign Economic Relations. Swiftly individual departments. together with the new finance minister Foreign banks with branches in the paying interest in kyats. foreign banks to support the country’s approved by parliament, the new U SOE WIN and deputy finance minister country are now permitted to conduct financial industry and economic ministry is headed by career diplomat In addition, the business community U SET AUNG, are seen as the key drivers wholesale banking services and other However, the domestic market in development. U THAUNG TUN, who is also chair of is hopeful that the ministry will ensure behind the country’s economic reform. financial services, according to the latest retail banking remains off-limits for the Myanmar Investment Commission that all proposed regulations and directive issued by the Central Bank of foreign players. Foreign banks can now lend in (MIC) and National Security Adviser. bills related to the private sector In November, State Counsellor Myanmar (CBM). both foreign currency and the national The new minister is a full member of would be properly consulted on. The DAW AUNG SAN SUU KYI visited In addition, foreign banks will be currency, and they have received DAW AUNG SAN SUU KYI’S top cabinet. Directorate of Investment and Company Singapore to woo regional investors Also, foreign banks are free to set allowed to expand their number of permission to provide every trade- Administration arranged public at the 2018 ASEAN Business and their own interest rate as long as those branches this year. related banking services. One of the new body’s key consultation on the draft Insolvency Investment Summit. loans are in foreign currencies. All loans responsibilities is to streamline the Law and invited input from the public offered in the Kyats must adhere to the CBM’s deputy governor U SOE Analysts expect this to bring entire investment process through and stakeholders before the proposal “We would like investors to view rule that the interest rate must be below THEIN was quoted by a local newspaper positive impact on Myanmar’s lacklustre a single-window system. The single- was approved by the cabinet or sent to investing in Myanmar as investing in the 13%. saying that “Local banks have been investment landscape. The country is in window system should eventually allow the legislature, and businesses hope the future of ASEAN,” she urged. allowed to do so for 25 years. They need of capital investments to develop businesses to apply for and complete all new ministry will do so for all relevant In short, foreign bank branches still have capital requirement. We can’t its infrastructure, which is seen by many draft regulations. can now provide loans and other close local banks - even they have yet to as a prerequisite for further growth.

EuroMatters 3 JAN–MAR 2019 8 9 EuroMatters 3 JAN–MAR 2019 MICROECONOMY PROFILE

Every quarter, EuroMatters conducts a personal interview with a Myanmar employee working at a European company in Myanmar. They share with us their personal story and life in Myanmar. Working in a European organisation - from a Myanmar perspective

Can you tell us about yourself? – not just professionally in terms What is your background? of ‘hard skills’, but also in terms What do you do in your of interpersonal skills, like organisation? teamwork and coping with work stress. I am KO PHYOE, from a small township, Another core aspect of Kyaukpadaung in European corporate Mandalay Region. I culture is its flexibility. spent my early years in Employees are given a public school and a room to manage their government university own schedules as long in my home region, as we deliver what is studying part-time and expected of us, and graduating in 2017. there is an extraordinary degree of trust within the Meanwhile, I moved to organisation. Yangon in 2012 and started working for a tour operator Do you speak other at the Ahlone & Botahtaung languages besides of English seaport for seven months. After and Myanmar? Are you maybe that, I changed my career direction learning a European Language? and moved to the hospitality industry for a year. I then began working in an Right now, I am focused on improving outbound tour company as a manager, my English fluency and proficiency, but for a total of 3.5 years, before joining the The diversity of the employees is also I’d like to pick up another European current employer. I have been working awesome. With so many colleagues language in the not-so-distant future. for a European organisation for more from different European countries, I If I have to choose now, I’d pick either than 18 months by now. am positively struck by the differences Spanish or French, because both are and diversity. This multi-cultural widely spoken across the world. With What is your role in the organisation? environment reminds me of Myanmar Spanish, I could navigate most of Latin in fact! America, for example. I am involved in market research and business development reports for Did you face any cultural differences What do you like most about Europe? clients, as well as communication and working for a European organisation? Every stay at a Mercure Hotel offers you a new experience! coordination. If so, how did you overcome them? I appreciate the country music in Italy and Ireland. The Irish folk song ‘Nancy What is your experience so far The European approach at the Mulligan’, for example, is among my ROOM TYPES SERVICES & FACILITIES INCLUDE working for a European organisation? workplace was at first rather different all-time favourites. I also love European Immediate contact for Ready to Work Space - MiCasa Restaurant & Bar from the culture I was used to. Notably, food and the fact that some of the Deluxe room, One, Two and Three Gym & Outdoor - Swimming Pool with Children Pool It has been incredible. In European I came to realise that having feedback delicious dishes are not that hard to bedroom apartments with fully equipped kitchen, high cellings Kids Club - Function & Meeting Rooms - Room Service organisations, employees are invited to is an important element in a European make. It is a pleasant surprise, in recent and balconies that overlook the pool or city view. Laundry - Daily Housekeeping - 24 hour Security - Free Wifi. contribute to the team by offering their company. In my organisation, my years, to realise that some popular views and input. This is not common in seniors, line manager and colleagues dishes could be made with a simple my experience before. It was something tend to give me constructive feedback. recipe, such as salad dish. This requires new to me. This proves to be tremendously helpful quite a short preparation but still very No.17, Kaba Aye Pagoda Road, Yankin Township, Yangon, Myanmar. for me in improving my performance tasty! Tel: 951 650933, Fax: 951 650960

EuroMatters 3 JAN–MAR 2019 10 Email: HA3N7 [email protected], www.mercureyangonkabaaye.com INTERVIEWINTERVIEW WITHWITH HANSHANS VANVAN BAALENBAALEN INTERVIEW WITH HANS VAN BAALEN

HANS VAN BAALEN PRESIDENT OF ALLIANCE OF LIBERALS AND DEMOCRATS FOR EUROPE (ALDE) The EU, Brexit and a shifting world order

ILATERAL RELATIONS between the allocation of €688 million aid under the Multi-annual Indicative European Union and Myanmar has recently Programme 2014–20. The EU’s support for the country’s reform been a rocky ride. Given the extremely process focuses on four key sectors: rural development, challenging political conditions in Myanmar agriculture and food and nutrition security (€241 million), concerning the ongoing Rohingya crisis, the education (€241 million), governance and rule of law (€96 EU has not signed the investment protection million), and peacebuilding support (€103 million). In addition, agreement (IPA) with Myanmar. Brussels has around €45.5 million worth of ongoing projects - covering development assistance and humanitarian aid - In September 2017, the Committee on International targeting, for instance, livelihoods, education and resilience in Trade of the European Parliament announced that it has the troubled Rakhine State. postponed its visit to Myanmar, which was meant to finalise the EU-Myanmar investment agreement. Businesses still hope In terms of trade, Myanmar currently benefits from the that the deal could be inked in the future. The conclusion of EU’s Generalised Scheme of Preferences (GSP), which gives an ambitious agreement would have provided the necessary least developed countries (LDCs) customs-free and quota-free guarantees for European investors in Myanmar, and vice- access to the world’s largest market for all products except versa, as well as promote responsible investments from the weapons. This traces back to 2013, when Brussels reinstated bloc to contribute to the country’s economic growth. GSP for Myanmar as a means to provide political, economic and social support to help the country move towards democracy. With this backdrop, EuroMatters sat down with Since then, Myanmar exports have benefitted hugely from HANS VAN BAALEN MEP, President of Alliance of Liberals and such access and export sectors such as garment have grown Democrats for Europe (ALDE), to talk about Europe’s future. robustly year after year, creating hundreds of thousands of job ALDE is the European Parliament’s liberal-centrist group and a opportunities. major transnational alliance of liberal politicians across Europe. Total trade between the two partners equalled €2.09 HANS VAN BAALEN was elected President of ALDE on a billion in 2017. The EU, Myanmar’s sixth biggest trade partner, two-year mandate on November 21, 2015 at the Party Congress imported goods worth €1,558 million from the frontier in Budapest, Hungary. He has been a Member of the European economy and exported goods worth almost €540 million to the Parliament since 2009. Before that, he was a member of the growing market. EU imports from Myanmar are dominated by Dutch parliament from 1999 to 2002 and from 2003 to 2009. agricultural products and garments. He was also the President of Liberal International between 2009 and 2014. Between 1988 and 1998, he was managing But the ongoing Rohingya crisis looms large in the country director of Deloitte. and beyond. Despite efforts from the international community to help resolve the humanitarian challenges and address very The interview took place at a time where Myanmar is complex issues surrounding the crisis, Myanmar’s situation caught at a critical juncture regarding its political and economic has not progressed as anticipated by EU officials. As a result, transition, of which the EU has provided important economic EU Trade Commissioner CECILIA MALMSTRÖM on October and political support. 3 last year announced that the bloc was considering ending Myanmar’s trade privileges due to the alleged human rights EU aid plays an active role in Myanmar’s development. The violations in northern Rakhine. A decision would be reached bloc is currently supporting Myanmar’s government with an within this year.

EuroMatters 3 JAN–MAR 2019 12 1313 EuroMatters 3 JAN–MAR 2019 INTERVIEW WITH HANS VAN BAALEN INTERVIEW WITH HANS VAN BAALEN

Brexit Assuringly, British cabinet ministers have publicly said that their parliament will not allow a no-deal Brexit to take place as Among the most immediate challenges, it is Brexit and its a majority of the lawmakers are opposed to no deal. implications for the EU which HANS VAN BAALEN emphasised. Beyond the short-term arrangements, Prime Minister In June 2016, people in the UK voted to leave the European THERESA MAY has already committed “to achieving a deep Union in a referendum, causing a major upheaval in the and special partnership with the European Union”. But with geopolitical landscape across the region. only less than three months until Britain is due to leave the EU, there are still critical questions over the long-term future of “Europe finds itself in unchartered waters. For the first time British-EU economic cooperation and of London as the bloc’s in the history of European integration, a country wants to leave pre-eminent financial centre. the Union. Brexit is going to have a major impact on the EU,” HANS VAN BAALEN said. On a broader scale, however, the UK is expected to side with Europe on upholding the rules-based international order, Citing Britain’s status as the world’s fifth biggest economy rather than embracing DONALD TRUMP’S anti-globalism and a permanent member of the United Nations Security stance. “We have seen what happens when the natural Council, HANS VAN BAALEN said the UK has strong political, patriotism which is a cornerstone of a healthy society is warped economic and historical ties with the continent. into aggressive nationalism, exploiting fear and uncertainty to promote identity politics at home and belligerent confrontation As the second largest economy within the bloc, the UK is abroad, while breaking rules and undermining institutions,” also an active player in upholding the multilateral order and MRS MAY already warned. has a history of championing free trade. China and Japan, two of the world’s three largest economies, have expressed worries For HANS VAN BAALEN, another big challenge for Europe At a time when populism, nationalism and protectionism business in Singapore and also take advantage of Myanmar’s about the potential economic turmoil from a disorderly is the instability at Europe’s borders. The EU is surrounded by are on the rise and when democracy is in retreat in some greater openness. departure, as well as losing Britain’s supportive voice for free unstable states in the south, in relation to north Africa, and countries, the EU is stepping up efforts to work with other trade within the EU. authoritarian regimes in the East, notably Russia and Turkey. countries to uphold and defend the rules-based international In the long run, the AEC integration will allow Southeast order and its multilateral institutions. Asian countries to harmonise regulations and economic “If the UK leaves the EU without a deal, it will be a lose- So, as a father, what kind of Europe does HANS VAN strategies, recognise each other’s professional qualifications, lose situation for both Britain and the EU,” HANS VAN BAALEN BAALEN envision for the next generation? “For my son Committed to multilateralism and consult more closely on macroeconomic and financial warned. The key, he argued, is to fight for “a workable deal ROBERT, the EU should offer opportunities and not obstacles policies. between the EU and Britain, which promotes trade and or bureaucracy. He should be able to feel both Dutch and “The European economy is on the rise, after years of recession. guarantees the rights of EU citizens in Britain and vice-versa.” European in a free, prosperous and safe Europe.” However, for entrepreneurs both inside and outside the EU, More significantly, the EU and Japan concluded negotiations there is still much to be gained by completing the European on a free trade pact last month, paving the way to establish single market and brokering new free trade agreements with the world’s largest open economic area. The deal, combining other economic blocs,” HANS VAN BAALEN said. the 28-nation bloc and the world’s third largest economy, will remove EU tariffs of 10 percent tariffs on Japanese cars and the The EU has sealed several multilateral partnerships 3 percent rate typically applied to car parts. For the EU, it will recently, illustrating the bloc’s commitment to multilateralism. scrap Japanese duties of some 30 percent on EU cheese and 15 percent on wines as well as allowing it to increase its beef and Last October, the EU inked a free-trade deal with Singapore pork exports and gain access to large public tenders in Japan. in October, which the two parties hope to take effect this year. The EU is also hoping to seal free trade agreements with the This would be the EU’s first trade agreement with a member of Mexico and the Mercosur bloc of Argentina, Brazil, Paraguay the 10-strong Association of Southeast Asian Nations (ASEAN). and Uruguay. In addition, it remains interested in a deal with Singapore is among the biggest investors in Myanmar, with a ASEAN, after talks were shelved in 2009. total of US$19.3 billion across 286 projects as of September. Many European investors enter Myanmar via their Singapore But multilateral cooperation is not all smooth and orderly. subsidiaries. The FTA with Singapore would open up the For Europe, US President DONALD TRUMP’S unorthodox Myanmar market for EU investors indirectly. approach to diplomacy and international politics presents a major risk. As Myanmar is set to join the ASEAN Economic Community (AEC) soon, integration would upgrade the country’s regulatory “The breakdown in negotiations for a free trade agreement environment and hence make it easier to do business. between the EU and the US is a missed chance. Although Businesses expect to see improvements in infrastructure, President TRUMP is a rather unconventional president with an transparency and regulation of industries following the ambiguous attitude towards Europe, we need to reinvent the integration. Thus, with a EU-Singapore FTA and Myanmar Transatlantic relationship and find new ways for political and joining the AEC, European businesses will find it easier to do economic cooperation,” HANS VAN BAALEN said.

EuroMatters 3 JAN–MAR 2019 14 15 EuroMatters 3 JAN–MAR 2019 SUCCESS STORY SUCCESS STORY

In every edition, one of our partner members has the opportunity to be featured in the Success Story, wherein the details of an international investor coming to Myanmar are revealed. We are granted with a unique take on the challenges faced, as well as with an illustration of the potential they recognise which has motivated them to expand into Myanmar. Luther gets things done in Myanmar HE LATEST World team of four foreign and local lawyers new sectors formerly prohibited for Bank index ranks and accountants. Since then, our team foreign investments,” MR BOHUSCH Myanmar as the worst has rapidly grown, with more than 50 continued. For example, Luther’s clients place in ASEAN to do German, French and Myanmar lawyers, have registered the first 100% foreign- business. Geopolitical corporate secretaries, accountants and owned wholesale trading company in uncertainties, tax advisers providing the complete Thilawa Special Economic Zone (SEZ) meanwhile, have considerably range of legal and tax advice as well and the first joint-venture motor vehicle dampened investor confidence in as accounting, payroll and corporate showroom. the country. But there are those who secretarial services,” MR BOHUSCH remain faithful. Luther believes that said. Over the last three years, Luther has the risks and challenges in Myanmar experienced changes in the investment do not outweigh the opportunities, for The law firm is now advising clients landscape. Notably, there has been the forces of liberalisation, economic in all stages of the business lifecycle, a decrease of new investments, reform and technological progress namely, from the establishment of a particularly from foreign SMEs. But which have brought Myanmar to this Myanmar business presence, through transactions with existing Myanmar point are nothing compared with their ongoing legal and tax advice, corporate businesses, both in the form of potential to enrich the lives of millions secretarial services, bookkeeping, acquisitions as well as foreign financing, of families across the country. accounting and payroll up to the have increased considerably. Over time, dissolution of a business. It helps the law firm has also become more added. The focus of Luther’s advisory can now be done within one working day, existing Myanmar businesses permitted As the government in Naypyidaw their clients implement legal, tax and involved in the non-profit sector. services is, however, different, and bringing Myanmar on even-level with under the new Companies Law, spell seeks foreign expertise to change corporate compliance structures, it manages to continue to grow and leading investment hubs like Singapore. positive and meaningful changes for Myanmar for the better, for Luther it is allowing the clients to focus on their “While we, of course, hope to see a expand the client base. This represents a significant step foreign players. Therefore, Luther time to seize the opportunities to deliver day-to-day operations. resurgence of European investments forward for the business environment. noticed a resurgence of investor interest prosperity and growth for the benefit of to take advantage of the latest legal New opportunities and changes to enter Myanmar. the country’s people and businesses, Today, Luther boasts more than reforms, particularly in the trading, “We hope that the government will now and for generations to come. 400 clients from nearly all key sectors in insurance and finance sectors, we Since taking office in 2016, the NLD-led continue this positive trend, particularly “That being said, European Myanmar, comprising of multinationals expect a continued focus on the government under DAW AUNG SAN on an administrative level, by reforming investors have to understand the The law firm decided to enter as well as small and medium-sized implementation of international SUU KYI primarily focused on the peace other departments such as the Internal numerous challenges still existing in Myanmar in 2012. Luther Corporate enterprises (SMEs), international compliance standards required by and reconciliation process between Revenue Department and the land Myanmar, be it legal restrictions such Services Limited was incorporated in investors, embassies, NGOs and foreign investors, particularly as a the country’s ethnicities. That does not registries. The recent establishment of as land ownership, non-transparent 2013, followed by Luther Law Firm domestic businesses. result of the recent increase of foreign mean that no progress in economic the new Ministry for Investment and administrative procedures and a weak Limited in 2015. Since then, Luther investments into existing Myanmar reform has been secured. In fact, the Foreign Economic Relations shows the rule of law, or unfamiliar customs has become one of the few prominent Pioneering new laws businesses,” the lawyer explained. administration has implemented the government’s commitment to further and the general lack of experience in foreign law firms in this country. two landmark legislation - the new support the development of an open international business practices.” While the firm’s initial focus was on Myanmar is not a broad, sunlit Investment Law and Companies Law - and fair market economy, which should EuroMatters sat down with Luther’s corporate and regulatory compliance upland for foreign businesses - the and rebooted the Myanmar Investment strengthen investor confidence in the The key, MR BOHUSCH stressed, is resident managing director and partner and commercial law, its team has market has its unique set of challenges. Commission and created the Ministry coming years,” the lawyer emphasised. to manage expectations and understand ALEXANDER BOHUSCH to discuss how meanwhile been engaged in various 2017 has seen a few exits, including of Investment and Foreign Economic that most investments here need to their business expanded in Myanmar transactions, including equity American Herzfeld & Rubin PC and UK- Relations. Despite administrative hurdles have a long-term vision. and what potential the local market investments of private investors and headquartered Berwin Leighton Paisner and political challenges, this frontier represents. development banks, acquisitions, joint (BLP). MR BOHUSCH highlighted the economy has vast potential for European “Myanmar offers huge opportunities ventures as well as some of the largest Myanmar Companies Online (MyCO) investors in a wide range of industries. for investors from all sectors, but it is In the wake of the seismic shift in financing transactions in Myanmar’s “Due to the conflicts in Rakhine registry system of the Directorate Clients in sectors previously closed to important to understand the current Myanmar’s politics and economy a few history. State and the resulting reputational of Investment and Company foreign investments, such as wholesale limitations and manage expectations. years ago, Luther chose to make an damage for Myanmar, difficulties with Administration (DICA) and streamlining and retail trading, education, finance Most European investments will require entry to assist foreign investors with “What makes Myanmar special is the implementation of new laws and of administrative processes as well as and insurance welcome the recent a long-term commitment to Myanmar’s their business activities in this frontier the opportunity to ‘test’ new laws and compliance with the rule of law, as well the liberalisation of various sectors, steps taken to liberalise investment developing market, which may not yet economy. regulations, and our clients are often as the continuing lack of transparency such as wholesale and retail trading. restrictions. provide the infrastructure, skilled labour the first to register under new laws and in administrative procedures, the last or customer purchasing power to yield “Our first office was located in regulations, establishing new legal forms two years were quite challenging for Under DICA’s new online registry These steps, combined with the short-term or even mid-term profits,” he downtown Yangon and run by a small previously not available, or entering many foreign law firms in Myanmar,” he system, the incorporation of a company possibility to acquire or invest into remarked.

EuroMatters 3 JAN–MAR 2019 16 17 EuroMatters 3 JAN–MAR 2019 BUSINESS BUSINESS

HEALTHCARE enforcement, the private sector has a and that his group is “looking towards “Nowadays however, we see these role in bringing foreign expertise and expansion into other cities in due services available in regional centres as human capital to some segments of the course”. well, which ensures that more patients Modernising Myanmar’s hospitals and clinics population. As the economy opened have access.” This is in everyone’s up and as people gradually become Better services and information interest, because more patients affluent, some investors have identified are diagnosed early-on and treated this area as a key opportunity. Over the past few years, urbanisation appropriately. and economic growth have both given In 2015, Yangon-listed First Myanmar more people access to better health DKSH is involved in helping Investment (FMI), led by Myanmar services and information, a process Myanmar to improve the treatment for tycoon SERGE PUN, and Indonesian supported by European expertise. strokes. The company is working with conglomerate Lippo Group created several hospitals to help develop the a joint venture Pun Hlaing Siloam DKSH Myanmar boasts more than protocols that will safeguard that those Hospitals (PHSH), with an operating 2,700 specialist employees in Myanmar patients who are hospitalised because name of Yoma Siloam Hospitals Pun and has been present since 1996. Its of a stroke are promptly and effectively Hlaing. FMI owns 60% of the JV while portfolio here includes consumer goods, diagnosed and treated. “In many cases, Lippo, which is the larger operator of healthcare, performance materials and if they are treated appropriately and hospitals in Indonesia under the Siloam technology. The Swiss multinational quickly, they may be able to walk out the brand, has 40% stake. has a strong network throughout the hospital with no permanent disability,” country, with the head office in Yangon MR WRAY added. Over the last three years, the group and branches in Mandalay, Myitkyina, has already expanded to various parts of Taunggyi and Mawlamyaing. The opening up of the economy and the country. In Yangon, PHSH currently growth are not the only key catalysts. boasts a flagship hospital in Hlaing PHILLIP WRAY, vice president of Urbanisation – where cities grow and Tharyar, a clinic each in Botahtaung DKSH, told EuroMatters that he was people move from rural to urban areas and Thanlyin’s StarCity. Beyond the positive about the government’s long- – will provide more and better health commercial capital, it has a clinic in term plan for the sector. services to a bigger proportion of the Shan’s Nyaung Shwe and a hospital in population in the years to come. Mandalay. The health ministry drew up the “Myanmar Health Vision 2030”, “We may start to see the average Last year, PHSH acquired the sixth an ambitious, long-term health life expectancy grow in line with other establishment with the purchase of development plan, as well as, more countries and most importantly, the a majority stake in a southern Shan recently, the new five year National population will see an improvement in hospital for US$4,900,000. Following Health Plan (NHP) 2017–2021, providing quality of life.” the acquisition in September, a new JV a key direction and setting targets. The S THE country Over the same period, life expectancy procedures and approach and mindset has been established. PHSH will operate 2030 Universal Health Plan serves as a In order to realise this vision, emerges out of increased for both men and women. of senior bureaucrats to deliver quality and manage the hospital, with Yoma roadmap to expand and modernise the however, the software in the hospitals isolation and and inclusive health services for the Siloam Hospitals Pun Hlaing holding country’s healthcare services. and clinics matters. dictatorship, Despite the considerable progress, masses. 70% interest and DR TUN AYE, the local Myanmar’s Myanmar missed the targets of partner, holding 30% of the JV. Above all, the government aims at For U THIN JIA HAUR, deputy chief authorities have been Millennium Development Goals 4 and 5, Two areas considered by the World achieving universal health coverage representative of B. Braun Melsungen consistently endeavouring, with limited child and maternal health, respectively. Bank as impediments on doing business SEIN Hospital, located in Shan’s (UHC) by 2030. Currently, an Essential in Myanmar, the sector benefits from resources, to jump-start its severely Thus, ending preventable deaths of in Myanmar - access to finance and capital Taunggyi, is a 100-bed hospital Package of Health Services (EPHS) is a better infrastructure but the lack of under-funded healthcare system. The mothers, newborn and children will human capital - stand in the way. As covering 0.46 acres of land, and being developed under the aegis of the competency for nurses and doctors are network of hospitals and clinics require require substantial efforts to meet the of 2012, official statistics suggest that provides primary to secondary medical $200 million loan from the World Bank serious challenges. enormous investments, either from new Sustainable Development Goals – the country has 9 hospital beds per services including surgical procedures, as part of the UHC. companies or from the government’s as recognised in the country’s National 10,000 people, and, as of 2014, 0.29 laboratory services, imaging as well He said hospitals have started to expenditure, before the hardware and Health Plan 2017–21, launched in March psychiatrists for every 100,000 people. as general healthcare and diagnostic MR WRAY said the investments and invest in quality equipment but they software could serve the needs of the 2017. Not only is it insufficient to meet services. The blueprint is to develop the public-private partnerships under the do not have the human capital to country’s burgeoning population. the country’s demands, but it lags existing hospital into a PHSH-branded plan in infrastructure, diagnostics and operate the equipment in a proper In Myanmar’s context, it is important significantly behind neighbouring complex by increasing the number of workforce training have led to much way. The competence of medical staff Progress has been secured. The to understand that the country’s vast economies like Thailand, in which the beds and upgrading the facilities, and better services being available in the is undermined by the lack of incentives World Health Organisation (WHO) said bureaucracy was never designed to number of hospital beds per 10,000 hiring specialist doctors and medical growing urban clusters. to learn new techniques and modern that infant mortality rate (IMR), under- provide health services or any public reached 21 in 2005 already. professionals. medicine. This is due to the “very low five mortality rate (U5MR), and measles, services. It was devised as a system In the past, patients would need to salary” for the employees and the trend mumps and rubella (MMR) all declined of controls, primarily to serve special While an overhaul of the entire For U TUN TUN, FMI’s COO, the visit Yangon or Mandalay for healthcare that healthcare workers are moving between 1990 and 2015 in the country. interests, back in the junta era. It will take healthcare system will ultimately Taunggyi acquisition is to build up a services, he explained. abroad for better career prospects. many years to change the government depend on government policy and hospital network across the country

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HEALTHCARE

owned either by locally registered Pioneering logistics and insurance for medical supplies domestic businesses or non-resident businesses registered outside of TOTAL OF 2.12% be maintained in temperatures between Secondly, the underdeveloped Myanmar. of Myanmar’s GDP two to eight degrees, and diagnostic energy infrastructure makes the was spent on health reagents need to be maintained below storage more difficulty. Maintaining According to Daizen Myanmar, the in 2017. A report last minus 20 degrees. warehouses, large industrial country’s first operator of free zone year showed that, refrigerators and freezers within their warehouse services, the measure will however, health European companies such as Zuellig required temperatures is difficult, as facilitate and boost trade for both spending is forecasted to grow from Pharma play a big role in ensuring electricity supply can be unreliable at locally registered domestic businesses US$1.476 billion in 2017 to $2.364 appropriate storage conditions by times. The cost of running multiple and non-resident businesses registered billion in 2022. It is a significant increase, bringing innovative packaging solutions generators is also very high. DKSH urged outside of Myanmar. In addition to the though the amount is still dwarfed by into the Myanmar market. Zuellig Myanmar to establish reliable energy introductions of new policies, there spending in other ASEAN countries. Pharma recently launched its eZCooler supply as soon as possible. are numerous Overseas Development solution. eZCooler significantly extends Assistance (ODA)-backed projects to It was MAHATMA GHANDI who the storage time of temperature- Thirdly, as the country moves improve the roads accessibility and port said: “A nation’s greatness is measured sensitive products in transit from two towards the government’s objective of capacity placing Thilawa ahead of other compared to conventional road freight change as the finance ministry plans to by how it treats its weakest members.” days with a traditional system to five securing Universal Health Policy, it will industrial parks as a potential regional and also eliminated the need to grant foreign insurers licences later this Despite the limited resources, days. be critical that the entire population of logistics centre. transload at the border. The trial was year. paramedics, doctors, nurses, community Myanmar have access to the required conducted by Myanmar International health staff, managers, IT workers and Zuellig Pharma Myanmar’s general quality standard medicines. TOMOAKI YABE, managing director Freight Forwarders Association (MIFFA), A new health insurance scheme was support staff across the country all work manager FREDERIK MEERHOFF said, of Daizen, said these standardised Daizen and Malaysia-based Overland introduced in mid-2015, but take- together to save lives and provide the ultimately, eZCooler helps driving Logistics does not only concern the warehouses and new policies give Total Logistic Services (OTL). MR YABE up was minimal, with fewer than best care possible. healthcare access in Myanmar. efficiency and cost-effectiveness of the alternative methods for foreign emphasised that this represents a safe 2000 applications after six months of sector. It is critical to the efforts against companies to distribute their products alternative to ocean freight for a wide operation. Revision of health insurance But the difficulty in transport and “The eZCooler has been developed illicit pharmaceuticals as well as other into Myanmar by allowing storage of range of suppliers, especially European in 2016 did little to encourage growth. logistics has proven to be a major hurdle using a unique thermal isolation system forms of illicit trade which prosper from duty-unpaid cargo until it is required by companies active in Thailand. The choice for low and middle-income for them, as well as for the broader that maintains the specific temperature vulnerabilities in the supply chain and the local buyers. The benefits include people remains very limited. pharmaceutical and medical supply of a product for up to five days, enabling weaknesses in regulation. much-reduced delivery time, corruption- Outside the SEZ, however, there sector. greater reach for these products across free Thilawa customs processes and remain unique challenges for transport “In practice, every insurance obtained Myanmar – particularly to the hard to According to JEFFREY HARDY, improved cash flow for the local buyers. in pharmaceutical and medical by a foreign insurance provider will be PHILLIP WRAY, vice president reach remote or rural areas,” he told director general of business-led initiative His warehouse, covering 10,000m2, equipment industries in terms of valid in Myanmar only if it has been of DKSH, said the underdeveloped EuroMatters. Transnational Alliance to Combat Illicit boasts 24-hour security guards, CCTVs, product characteristics and logistics reinsured by the Myanma Insurance,” transport and energy infrastructure Trade (TRACIT), a well-regulated and mechanised facilities and warehouse requirements. Rural regions have no NISHANT CHOUDHARY, co-chair of creates many challenges in logistics. As a distribution company, DKSH secure supply chain, as well as effective management system with barcode cold chain facilities, making it imperative EuroCham’s legal advocacy group, said. must ensure that its products are law enforcement, can help deter the scanners – all imported from Japan. for deliveries to be stored in major cities, It is therefore crucial for the insurance For one, moving products within delivered in the appropriate conditions trade of fake medicines. with a long lead time. market to open its door to foreign Yangon is difficult due to the increased at all times. “Recently, one of our clients These upgrades represent a window investment. Liberalisation will not only traffic volume, while moving products to partnered with the health ministry to Better logistics of opportunity for pharmaceutical Temperature-sensitive products increase the inflow of foreign capital the rest of the country also has its fair provide insulin to patients in more rural and medical suppliers who trust require cold chain solution which is still in the country, but would also bring share of challenges. areas, bringing state-of-the-art life- A recent development means products international management systems. scarce in Myanmar. Meanwhile, medical technology and expertise which current saving treatment options closer to more can come to the country in a secure way. Daizen’s logistics centre caters for suppliers demand a high-quality players are lacking. “Poor roads, insurgent activity, the people. We are required to validate our Myanmar’s first Special Economic Zone “first-in, first-out”. Its barcode scanners operation, i.e. low % of delivering wrong sheer size of the country and the changes distribution at least once per year, using (SEZ) in Thilawa, southern Yangon, has prevents incorrect dispatch which is products, expired products, getting Specifically, health insurance in temperature, from 40 degrees in the temperature-logging devices on every taken active steps to bring in foreign especially vital for pharmaceutical and the level of stock right etc. Different is one sector which has been on a south to minus ten degrees in the north, route the products follow,” he went on. expertise and technology to ensure the medical equipment sectors. from some other consumers products, watch of foreign investors for a long create their own challenges in ensuring reliability and security of imports from delivery of wrong medication, or expired period of time, the lawyer added. It that medicinal products reach their MR WRAY also highlighted a few abroad. In addition, Myanmar’s transport products, can in extreme cases lead to is important for the health insurance destination in excellent condition,” MR aspects of the logistics challenge. ministry tested a pilot project using loss of life. market to open up to enable quality WRAY explained. Getting products to the border areas Last year, Thilawa introduced semi-trailer swapping with bonded hospitals and facilities in Myanmar. is hard, especially for emergency life- SEZ warehouses composed of both cargo, whereby the cargo was Insurance yet to take off MR CHOUDHARY explained that “It’s Most medicines must be kept in a saving products. The use of unmanned promotion zone and free zone electronically sealed at Myawaddy a general understanding that cost of temperature- and humidity-controlled drones to deliver these products and warehouse. Promotion zone warehouse Customs and transported to Thilawa Another bottleneck for the sector is the procuring insurance becomes cheaper environment to maintain their other products, like blood or plasma, is allows storage of domestic cargo (duty- Customs for physical inspection. insurance industry. Apart from the SEZ, if the insurance company’s pool is effectiveness. Cold-chain products, like currently under assessment. paid) while free zone warehouse allows This reduced the time needed to the insurance sector is closed off for larger.” vaccines and other injectables, need to storage of foreign cargo (duty-unpaid) reach Thilawa from Thailand by half, foreign service providers. This is set to

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HEALTHCARE implementation of telehealth solutions The Economist Intelligence Unit’s largely unregulated. U THIN JIA HAUR and innovative business models to Global Illicit Trade Environment Index said that the current price-driven market advance the healthcare system in the released last year - which measures demand has led consumers to opt for country,” MR LEE told EuroMatters. the extent to which countries enable substandard products without knowing Healthcare industry seeks to fight off illicit trade, or inhibit illicit trade – ranked Myanmar the risks. There is a lack of public Internationally, Philips, with a 82nd out of 84 countries evaluated, at the awareness on the danger of consuming develop human capital presence across more than 100 bottom in both ASEAN and Asia Pacific. products with inferior quality. countries, aims to improve the lives of Apart from Iraq and Libya, Myanmar 3 billion people annually by 2025. In line suffers from the poorest structural In response, Myanmar authorities with this mission, the Dutch company capability to effectively address illicit are now working with the World Health is committed to supporting Myanmar’s trade internationally, the report said. Organisation (WHO) to promote health long-term development. This proves to be near-fatal for the literacy promotion since 2014. pharmaceutical industry. Others are equally optimistic. Furthermore, as a nascent Frankfurt and New York-listed Fresenius “Illicit trade in falsified and e-commerce industry is gradually Medical Care (FME) - the world’s substandard pharmaceuticals is a taking off, internet marketplaces may largest provider of products and serious public health threat, and no exacerbate the problem, even if the services for people with chronic kidney country is spared,” JEFFREY HARDY, regulators begin to rein in the local failure - see the Myanmar market as a director-general of Transnational stores. MR HARDY saw this as a grave “considerable opportunity”, owing to Alliance to Combat Illicit Trade (TRACIT), threat. “The internet is a perfect hiding rising government spending on basic warned. In the case of Myanmar, illicit place for illicit traders; it provides an health coverage and a growing middle- pharmaceuticals present a serious risk international channel for sales where class demand for more sophisticated to lifesaving medicines, including those effective regulatory oversight and services. used to treat malaria, cancer, heart enforcement is often difficult, and the disease and other serious illnesses. identity of the criminals behind the “Given our direct presence in scheme are easy to conceal,” he went Myanmar, we are well-positioned to According to scientists at the on. meet the individual requirements University of Edinburgh and the of patients with kidney disease and London School of Hygiene and Tropical The WHO estimated that one in 10 ECURING HUMAN Myanmar has secured solid progress across the region. This includes medical actively support our partners in the Medicine, between 72,000 and 169,000 medical products in low- and middle- capital and systematically in some areas. It is taking huge steps equipment, software and services healthcare system to continue to raise children may be dying from pneumonia income economies, including Myanmar, eliminating illicit trade are in the fight against HIV, hepatitis C and to support the diagnosis as well as the standards of care in a challenging every year after receiving bad drugs. is either substandard or falsified. essential for Myanmar’s preventable death among people who treatment and after-care of patients. environment,” U THUREIN HTUN, Falsified and substandard medications Not only is this a waste of money for pharmaceutical and medical use drugs, according to a new report country manager of FME Myanmar, told might be responsible for an additional individuals and health systems that equipment industries to from Harm Reduction International RUBEN LEE, general manager of EuroMatters. 116,000 deaths from malaria. purchase these products, but consuming take off. released last month. The Global State Phillips, said that expanded access to these goods can cause serious illness or of Harm Reduction 2018 shows that healthcare, as envisaged under the For U THIN JIA HAUR, B Braun Illicit trade is not limited to even death. The healthcare system’s since 2016, the country has dramatically government’s National Health Plan, Medical Industries’ deputy chief pharmaceutical products. MR HARDY underfunded situation in Myanmar scaled up harm reduction measures, will require the availability of advanced representative in Myanmar, the biggest said there are also fake versions of For TRACIT, the solution requires certainly merits attention. As of 2014, the such as needle and syringe programmes medical technologies. Increasing the challenge for the sector is the lack of generic prescription drugs and over- a “cross-sector approach” to fighting total expenditure on health per capita (NSP) and opioid substitution therapy state budget for healthcare, securing manpower. the-counter (OTC) medicines, as well as illicit trade. Efforts should bring is US$103 billion, while expenditure on (OST). Both are evidenced to prevent the support from foreign expertise and medical devices such as contact lenses, different stakeholders on board, health accounts for 2.3% of the GDP, spread of blood-borne infection. attracting private investment will allow The shortage of human capital is condoms, and surgical instruments. i.e. health professionals, public and which in itself is already very small. The the sector to move forward, expand and slowing business growth and makes it private organisations, pharmaceutical life expectancy for male and female Access to good healthcare and modernise. difficult for the company to implement “In addition to consumer health manufacturers, distributors, are estimated at 65 and 69 years old education are important prerequisites the business plans, he said. Language and safety, illicit trade in falsified and wholesalers, retailers, and national respectively. for sustainable economic growth. Since Clearly, there remain serious barrier, lack of IT skills and other “soft substandard pharmaceuticals are a regulatory and enforcement agencies. Asia’s last frontier - as Myanmar is challenges to be met in the development skills” are the most common difficulties. threat of to public health by diverting More worryingly, the burden on known - started to reform its feudalistic of the healthcare system. Among them “We need the support from the local resources from already limited On top of that, education and the public healthcare system will rise economy in 2011, international players are establishing a health insurance workforce here for our daily operations, healthcare budgets, undermining awareness are critical to preventing the significantly in the future. The country, have established operations in major system, infrastructure development without it we can never achieve the confidence in health systems and trade in illicit pharmaceuticals, especially with a young workforce, is currently in cities to tap into the opportunities. This and, most importantly, human desired efficiency and results,” he posing economic and social challenges for online marketplaces. Legislation that demographic transition, moving slowly includes Phillips, Zuellig, Roche, Philips, resources. commented. to pharmaceutical companies operating provides for a well-regulated, secure towards an ageing population. DKSH and Sanofi. in the sector,” the expert cautioned. supply chain and criminal penalties “However, Myanmar has an Illicit trade that deter and punish unscrupulous Although public expenditure is Having set up its Myanmar offices in opportunity to leapfrog other healthcare Unfortunately, consumers in traders of fake medicines, effective law still very low and the boom in private 2015, Philips currently sells a portfolio systems – and technology must play But the debate on reforming Myanmar’s Myanmar are largely unaware of the enforcement and regional customs investments has yet to materialise, of healthcare products and solutions a role in best leveraging the available healthcare system should not focus dangers of fake medicines. Shops on cooperation are also indispensable. clinical resources. This may include the solely on the level of public expenditure. the street selling fake medicines remain

EuroMatters 3 JAN–MAR 2019 22 23 EuroMatters 3 JAN–MAR 2019 EAR ON MARKET EAR ON MARKET

Kantar TNS Connected Life survey Government use of personal with products and brands online with WHY ARE WE TALKING ABOUT covering 60 countries reveals that information to provide better only 19% researching products before globally, 40% of people are concerned services. purchasing vs global average of 56% and about the amount of personal emerging Asia average of 52%. information that companies know about 34% of people who are online in them, compared with 31% in emerging Myanmar are confident that the As familiarity with engaging with ? Asia on average. government uses the personal businesses and brands online TRUST information they know about people increases, so too will engagement with In Myanmar, only 12% of people share to provide better government services. e-commerce considering that only 7% of this concern. This is a reflection of the This indicates a willingness for more Myanmar online currently participates People often talk about the fact that there is a trust crisis in the world. secondary urban, and rural areas, relatively nascent experience for most people to engage with e-government in finding and buying products online vs followed by print newspapers and in the frontier economy with regard to services in Myanmar for efficient service 46% global average and 53% emerging This has been largely true for many years with only about a quarter of the population journal, in particular in metropolitan personal data use, however the insight delivery and engagement. Asia average. trusting the brands in their country. Yangon and Mandalay. from other countries also provides direction for companies and marketers Offline touchpoints remain major As more people trust businesses than Considering specifically social media, is to respect and be mindful of how data information source. governments, consumers want brands 30 Trust - Global your content relevant and trusted? that is collected about consumers or to proactively fight for what they believe customers in Myanmar is used. Offline touchpoints continue to in and to lead the change on problems 25 24 It is crucial that content planning for your dominate for trusted information rather facing the world today.1 23 23 23 22 target is not simply based around the Trust in big global brands more than social media in Myanmar across a 20 wide reach of a network as is the case pronounced in emerging markets. range of categories. for social media in Myanmar. Brands References 15 not only need to improve the way that More than 54% of people online in Myanmar trails regional and global 1 Edelman Trust Barometer 2017 content relates to their customers in Myanmar have more trust in products averages with regard to engaging 10 the moment, but they also need to work from big global brands than smaller harder to build trust among the 50% local brands. Whereas in developed 5 of people in Myanmar (vs 35% global countries, big is usually bad – “big average and 26% emerging Asia average) pharma”, “big four accounting firms”, Category Staff in store Ask friends / family Facebook 0 who think most of the information on big is tainted as big brands have been OTC* medicines 42% 28% 7% 2014 2015 2016 2017 2018 social media is unreliable. part of the socio-political system. The erosion of trust in the system has also Hair care 42% 28% 7% Staying true to brand principles among led to small being more trustworthy. Cosmetics 27% 16% 8% Trust matters because trust equals: authenticity in this rapidly changing all of the shouting is key with social • More people who want to buy your world? How can their relationships with media, especially when 23% (vs 31% In emerging markets like Myanmar, Oral care 26% 16% 3% product their customers become consistent and global average and 34% emerging Asia big brands have been distinct from Personal hygiene 26% 19% 8% • A greater willingness to pay a meaningful? average) believe brands should take a the socio-political system, and in many premium stance on key issues. cases the system has not been trusted, Infant milk 24% 29% 11% Stronger brands It’s not enough to see trust as the and big brands have often been a more • Baby food 23% 34% 8% • Better market results. outcome of everything we do. Now we Myanmar consumers show greater credible alternative. When the system have to facilitate it. trust and openness to sharing does not provide a safety net, trusting Skin care 14% 23% 9% In this connected, post-truth world, the personal information with brands, big brands is easier than trusting small *Over the counter default is suspicion, not acceptance. Traditional media remains more businesses and government than in brands. trustworthy than online and social other markets. Social media is rife with examples of media. Additionally, notions of trust change consumers questioning the role that Can your customers trust you with their with disruption and discontinuity – technology and brands play. As traditional media sources are facing data? whoever thought that people would greater pressure as trusted sources allow strangers to live in their homes In this highly sceptical environment, of reliable information, in a climate of In a relatively short period of time, or choose to live in a stranger’s home. KANTAR: INSPIRATION FOR AN MONTHLY HOUSEHOLD CATEGORY trust is the new currency. Those who rising fake news phenomena, where connectivity has changed our lives AirBnB is a relevant example of this EXTRAORDNARY WORLD EXPENDITURE CHANGES fail to nurture it can lose out. To regain does Myanmar stand? fundamentally as more and more growing sharing economy. Kantar TNS is one of the world’s largest research agencies trust will require marketers to be brave, activities go digital. Consumers are with experts in over 90 countries. With expertise in to eschew bad habits and go back to While one in two people in Myanmar will increasingly aware, however, of how Since when did financial technology innovation, brand and communication, shopper activation basics. use the internet and social media more much personal data they are sharing become a credible alternative to and customer experience, Kantar TNS helps clients identify, optimise and activate the moments that matter to in the future, today two thirds indicate with brands as a result of these activities traditional banks, and in markets drive growth for their business. Companies, therefore, face a crisis: how television as their most trustworthy and are growing wary of how the data is like Myanmar may be the catalyst for COUNTRY LEADER can they build and maintain trust and information source – especially in being used. increasing the banked population in the JASON COPLAND country?

EuroMatters 3 JAN–MAR 2019 24 25 EuroMatters 3 JAN–MAR 2019 SITE VISIT

EVENTS ON REVIEW

THE THIRD annual EuroCham’s Italia Myanmar, German Industry and Business Confidence Survey launched its Commerce in Myanmar, CCI France findings on Tuesday, December 11, 2018 Myanmar and Norway Chamber. in Yangon’s Novotel hotel. The objective of 11 Most participants were not surprised the event was to launch and discuss the by the results and expected some latest findings about European business DEC degree of anxiety and dissatisfaction sentiment in Myanmar. EuroCham also • TUES • in the feedback. Accordingly, the level presented its 2019 Business Guides with YANGON of investment decreased because one general and six sectorial guides on many companies are uncertain about agriculture, consumer goods, garment, the future. However, the panel agreed energy, health and manufacturing, all EuroCham Business that there is still a high demand for of which provide up-to-date, entry-level Confidence Survey 2018 quality products in the Myanmar information to European companies market. planning to invest in Myanmar. and Business Guides 2019 Launch The second panel discussion The keynote speech was given by lent a platform for co-chairs of H.E. KRISTIAN SCHMIDT, EU EuroCham’s advocacy groups to voice Ambassador to Myanmar, followed by a speech of U AUNG their views. The panelists discussed and concurred that the NAING OO, Director general of the Directorate of Investment Myanmar government is trying to improve the overall business and Company Administration under the Ministry of Planning climate. However, they acknowledged that the survey findings and Finance. U AUNG NAING OO highlighted that “Each come in line with the practical difficulties companies face on and every single euro of your (European) investment is your the ground. contribution to our democratic transition progress, so I do appreciate all the European investors for your interest in doing The survey and the debate converged towards the idea that business in Myanmar.” there are still many issues in Myanmar which affect Europeans confidence. However, the findings demonstrated that there is After the formal speeches, EuroCham executive director still a positive attitude among the European companies as they FILIP LAUWERYSEN presented the key findings from the are willing to stay even through hard times. business confidence survey and the highlights of the Business Guides, followed by two panel discussions. The first one The Business Confidence Survey and the Business guides are comprised Executive Directors from Camera di Commercio available for free on EuroCham website.

EuroMatters 3 JAN–MAR 2019 26 UPCOMING HIGHLIGHTS UPCOMING HIGHLIGHTS

EuroCham Construction Breakfast talk with EU Show-and-tell event by EuroCham Forum 2019 Ambassador to Myanmar, Anti-illicit Advocacy Group EuroCham Myanmar, together with leading European companies H.E. KRISTIAN SCHMIDT Illicit trade poses a significant challenge to some European represented in the Construction and Infrastructure Advocacy companies, as it creates an uneven playing field by undercutting Group, are pleased to announce the EuroCham Construction H.E. KRISTIAN SCHMIDT, Ambassador of the the prices of legitimate businesses, thereby discouraging foreign Forum 2019. The forum will feature a diverse outlook on the European Union to Myanmar will give insights investment. It also not only deprives the government of tax construction industry in Myanmar covering topics such as: on the business climate in Myanmar, followed revenue but it is a profound risk to public health and safety too. by a tour de table to get an update from the EuroCham Myanmar, together with leading European companies • Infrastructure Development private sector (business climate, new business represented in the Anti-Illicit Trade Advocacy Group, are pleased In this section, the most • Heritage Preservation legislation, views on government’s economic to announce a Show and Tell event to be held in March. notable events of the • Building Technology agenda). upcoming quarter are The objective of this one-day event is to raise consumer and Don’t miss out on this high-level advocacy event and join us in Please note that this event is reserved for EuroCham highlighted. From EuroCham government awareness by pointing out the dangers of buying/ shaping the construction sector of Myanmar. The EuroCham Myanmar’s members only. consuming illicit products and explaining how to identify licit/ Construction Forum to Construction Forum offers a variety of sponsorship opportunities. illicit products. joint networking with other chambers, be sure not to miss If you would like to attend, please register on our website. out on these essential events in Myanmar. More information to come on our website: JAN FEB MAR eurocham-myanmar.org/events/upcoming • TUES • • WED • • • 22 27 YANGON YANGON YANGON

JAN • WED • MAR YANGON • • 16 YANGON JUN 05 • WED • Joint European chamber Joint chamber networking with NAYPYIDAW British Chamber Myanmar networking The 3rd Myanmar-EU The 7 European Chambers, BritCham, CCI France Myanmar, EuroCham Myanmar, German Come and join us to enjoy some great networking Myanmar Business Chamber, Chamber of Commerce Italia - Myanmar, Myanmar Norway opportunities with BritCham members, or simply Economic Forum Business Council and SwedCham are pleased to invite you to the second edition of the Joint use the evening catching up with peers and business The 3rd edition of the Myanmar-EU Economic European Chambers Networking event on Wednesday 16th January from 6.30 pm to 8.30 pm associates. Light canapes and drinks will be served. Forum will take place in Naypyidaw on the at Le Cellier restaurant, Novotel Yangon Max. 5th of June 2019. Pencil in the date in your More information to come soon. agendas to join us in shaping the future of Join us on this special occasion and use this opportunity to expand your network and meet European investment in Myanmar. new people, or simply enjoy the evening catching up with peers and business associates by the relaxing atmosphere of Le Cellier. Look out for our next issue for more information, or log on our website: eurocham-myanmar.org/events/upcoming

EuroMatters 3 JAN–MAR 2019 28 29 EuroMatters 3 JAN–MAR 2019 The voice of European business in Myanmar

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Our Myanmar clients comprise of international and multinational private investors, MNCs and SMEs, Myan- mar businesses and conglomerates as well as embassies, state owned enterprises, international development organizations and NGOs.

With 13 European and 7 Asian offices and partner firms, Luther is one of the top addresses among German commercial law firms. Knowledge of the market in which our clients are active is a prerequisite for providing successful advice. That’s why our lawyers and tax advisors, in addition to their specialized legal knowledge, also focus on advising clients from particular industries.

Luther Law Firm Limited | Luther Corporate Services Limited Uniteam Marine Office Building, Level 8, Unit #1, 84 Pan Hlaing Street, Sanchaung Township, 11111 Yangon, Myanmar [email protected] | [email protected] | Phone: +95 1 500021 | Fax: +95 1 502852

Legal and Tax Advice | www.luther-lawfirm.com 0 Corporate Services | www.luther-services.com