BHASIN THE BUSINESS Burma International Business Collection EXPERT PRESS Business and Investment S. Tamer Cavusgil • Michael R. Czinkota • Gary Knight DIGITAL LIBRARIES Opportunities in Emerging Editors EBOOKS FOR Myanmar BUSINESS STUDENTS Curriculum-oriented, born- Balbir B. Bhasin digital books for advanced This book is a practical and comprehensive guide business students, written to succeeding in business and investing in emerg- by academic thought ing Myanmar, formerly known as Burma. It covers the leaders who translate real- country’s history, geography, demographics and market Burma world business experience size, political environment, economic conditions and into course readings and industries, and legal framework, cultural idiosyncrasies reference materials for including religious issues. It also discusses language, Business and students expecting to tackle beliefs and customs, business etiquette and attitudes, management and leadership management and working styles, meetings and deci- sion making, and negotiation strategies that work. challenges during their Investment professional careers. The author identifies incentives offered with regard to tax relief and repatriation of profits, the various sec- POLICIES BUILT tors that are opening up, and where opportunities for BY LIBRARIANS participation exist. He also highlights the risks inherent Opportunities in in entering an emerging and new market economy and • Unlimited simultaneous suggests ways of mitigating these risks. Strategies for usage success in an emerging Myanmar are propounded for BURMA • Unrestricted downloading Emerging Myanmar both investors and businesses. and printing This book allows for a deeper understanding of the • Perpetual access for a business environment in Myanmar. You will be better one-time fee able to evaluate the risk factors and options available • No platform or and then make meaningful investment and business maintenance fees decisions. • Free MARC records • No license to execute Dr. Balbir B. Bhasin is the Ross Pendergraft Endowed Professor of International Business at the University The Digital Libraries are a of Arkansas—Fort Smith. He holds a Master of Inter- comprehensive, cost-effective national Management (MIM) degree (with distinctions) way to deliver practical from the Thunderbird School of Global Management in treatments of important Arizona, and a PhD in International Business from the Balbir B. Bhasin business issues to every University of South Australia in Adelaide. Dr. Bhasin has student and faculty member. spoken at both Harvard and Oxford. He is multicultured and multilingual and has lived and done business in Asia, Australia, Europe, North America, and Africa. He is also the author of Doing Business in the ASEAN Countries and Assessing and Mitigating Business Risks in India. He For further information, a advises companies eager to benefit from the opportunities free trial, or to order, contact: in emerging Asia. [email protected] www.businessexpertpress.com/librarians International Business Collection S. Tamer Cavusgil • Michael R. Czinkota • Gary Knight Editors ISBN: 978-1-60649-409-7 www.businessexpertpress.com www.businessexpertpress.com Burma Burma Business and Investment Opportunities in Emerging Myanmar Balbir B. Bhasin Burma: Business and Investment Opportunities in Emerging Myanmar Copyright © Business Expert Press, LLC, 2014. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher. First published in 2014 by Business Expert Press, LLC 222 East 46th Street, New York, NY 10017 www.businessexpertpress.com ISBN-13: 978-1-60649-409-7 (paperback) ISBN-13: 978-1-60649-410-3 (e-book) Business Expert Press International Business Collection Collection ISSN: 1948-2752 (print) Collection ISSN: 1948-2760 (electronic) Cover and interior design by Exeter Premedia Services Private Ltd., Chennai, India First edition: 2014 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America. Abstract This book is a practical and comprehensive guide to succeeding in doing business and investing in emerging Myanmar, formerly known as Burma. It covers the newly emerging country’s history, geography, demographics and market size, political environment, economic conditions and indus- tries, legal framework, cultural idiosyncrasies including religious issues. It also discusses language, beliefs and customs, business etiquette and atti- tudes, management and working styles, meetings and decision making, and negotiation strategies that work. It identifies incentives offered with regard to tax relief and repatriation of profits, the various sectors that are opening up, and where opportunities for participation exist. It also highlights the risks inherent in entering an emerging and new market economy and suggests ways of mitigating these risks. Strategies for suc- cess in an emerging Myanmar are propounded for both investors and businesses. This book allows for a deeper understanding of the business environment in Myanmar. You will be better able to evaluate the risk factors and options available and then make meaningful investment and business decisions. Keywords Burma, Myanmar, Association of Southeast Asian Nations, Asian cul- tures, business opportunities, business strategy, cross-cultural commu- nications, emerging markets, foreign direct investment, global business, global strategy, technology transfer, international trade, international management, international marketing, international marketing research Contents Introduction ������������������������������������������������������������������������������������������ix Acknowledgments �����������������������������������������������������������������������������������xi Chapter 1 Background: Understanding Myanmar ..............................1 Chapter 2 Business Potential and Markets ........................................25 Chapter 3 Recognizing and Mitigating Risks ....................................67 Chapter 4 Strategies for Success in Emerging Myanmar ...................95 Chapter 5 Epilogue: Opportunities and Challenges in an Emerging Myanmar ..................................................111 Chapter 6 Web Resources ...............................................................123 Notes��������������������������������������������������������������������������������������������������131 References �������������������������������������������������������������������������������������������139 Index �������������������������������������������������������������������������������������������������153 Introduction “This is Burma, and it is quite unlike any land you know,” wrote Victorian author Rudyard Kipling in his Letters From The East in 1889. Myanmar, previously known as Burma, is a resource rich country in the emerging Association of Southeast Asian Nations (ASEAN). It is the largest country in mainland Southeast Asia with a population of almost 60 million. For years, it has suffered from gross mismanagement due to excessive govern- ment controls, inefficient economic policies, and the imposition of trade sanctions by the West due to political considerations. However, a new day has dawned over this highly cultured but isolated land, as it begins mod- ernization and gently but eagerly eases into the international community. Myanmar is the last large Asian country to open itself to the world. This has been termed Myanmar’s “Mandela” moment. Largely because of charismatic opposition leader Aung San Suu Kyi, the world will never be more interested in the country or more eager to invest there, as happened in South Africa in the early 1990s.1 Myanmar’s historic move toward democratization and reconciliation caught the world off guard. The new government has quickly initiated courageous and pragmatic political and economic reforms that are reintegrating it into the global community and accelerating its economic development. The international community has responded very positively. Sanc- tions have been lifted by the West and the East is leading the investment surge into the country. An onslaught to get into Myanmar has begun. Myanmar should attract foreign investment for all three reasons that typi- cally motivate multinational companies: resources, lower costs, and mar- kets.2 Being sizeable, unlike many smaller countries in developing Asia, Burma can grow relying on its own market as well as exports, and in a diversified manner if it industrializes successfully. But the bumpier road of some of its Southeast Asian neighbors suggests that success cannot be taken for granted. There will be challenges and risks, as has been the case for all emerging countries at the crossroad to a newer and less controlled environment. x INTRODUCTION Will the momentum toward democratization continue? Will it suc- ceed in bringing together the various ethnic factions to achieve inclusive- ness? Will the early entrants and foreign investors be amply rewarded for their risks? Will the coming period bring direct benefits to the average citizen? Will it avoid the mistakes made by its neighbors in the past and learn and benefit from their experience? Myanmar has a long way to go to realize its potential and succeed in bringing the long-awaited aspiration of a better life to all of its people, but the journey toward a brighter future has begun.