The pace and scale has been extraordinary. A nation which was once a by-word for human rights abuses, squandered economic potential and bad governance has taken a decisive leap forward, completing the process of gradual reform launched in 2011 by former President Thein Sein. History provides few examples of transitions enacted this smoothly.
The election marks a decisive break with the past and ushers in a new and exciting chapter in the history of a country which has struggled under military rule for over fifty years. The sanctions imposed during that era, already much reduced, now affect just a hundred individuals and companies and look set to fall away. Myanmar is now poised to share in the Asian economic success story. The incoming government inevitably faces formidable challenges as it struggles to confront the legacy of decades of mismanagement, but it also enjoys powerful advantages. It brings a clear commitment to economic and political reform and, as the first civilian and democratically elected government for many decades, rides a wave of international support and financing.
Importantly, the new government has made clear its economic inclinations – it is in favour of attracting foreign investment and the measures necessary to secure it, as well as competitive taxation rates and reducing barriers to trade. What is more, many of the key legislative measures underpinning this openness have already been passed by Myanmar’s Parliament, the Hluttaw. These include a new competition law (coming into force in 2017) that seeks to tackle restrictive practices alongside the instituting of a Myanmar Competition Commission, to a condominium law permitting foreign ownership of apartments (up to 40% of any condo building).
Myanmar’s fundamentals position it to follow the spectacular economic trajectory of its neighbours. It is strategically located, bordered by the vast consumer markets of China and India and the economies of SE Asia, with a population of over 50 million, 55% of which are under 30. Its rapid economic growth is fuelling rising per capita income and creating what will become a substantial consuming class.
These trends have become increasingly evident since the start of Myanmar’s reform programme in 2011 and look set to accelerate. The manner in which the government handled auctions for oil blocks and for telecom licenses was widely applauded and give grounds for confidence in its handling of future sales. The development of significant capital markets and the institutional investors that support them, will take time, but the first step of establishing the Yangon Stock Exchange has been taken. Opening it to foreign investors is the next – already promised – step. There is no going back.
The success of the telecoms sector demonstrates what can happen when the old monopolies are broken. The welcoming of international telecoms companies into the Myanmar market has within the space of two years transformed the sector and opened-up digital possibilities for millions of people who previously had access to neither a telephone nor the internet. The arrival of mobile payment systems will turn them from users into consumers, paving the way for e-commerce.
There are significant possibilities for agribusiness to create efficiencies in Myanmar’s vast but under-resourced agricultural sector. The ability to make the most from higher yields can only be realised through infrastructure investment and this – together with energy generation to meet soaring demand – will be central to the
Myanmar success story in the years ahead. That story is already being written. GDP continues to grow strongly, and is forecast to surpass 8% in 2016, the fastest rate in SE Asia and the fourth fastest in the world. Consumption continues to rise. Bell Pottinger, recognising that Myanmar looked set to embark on the path of its more prosperous Asian neighbours, opened its Yangon office in 2014 as part of our thriving practice in the region. As the only full service international strategic communications-focussed business in Myanmar, we have the connections and expertise to support you in the many areas that look set to grow in coming years.
These include public affairs, financial services, mobile technologies, consumer goods (including the potential for luxury products), healthcare, education and all areas of energy and infrastructure.
Graham Stewart has been Managing Director of Bell Pottinger Myanmar since June 2014 and runs the Yangon office. He is a former editorial leader writer with The Times, and has over 20 years of experience in media and public affairs.
Mark Canning is a former senior member of the British Diplomatic Service, and a noted South East Asia specialist, having served in the region for almost two decades, including as Ambassador to Myanmar and Ambassador to Indonesia. He has been a Senior Adviser to Bell Pottinger since September 2014.