THURSDAY, March 28, 2024
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OBG launches its second report on Myanmar

OBG launches its second report on Myanmar

Oxford Business Group (OBG), a global publishing, research and consultancy firm, on Tuesday launched its second flagship report on Myanmar's economy.

 Paulius Kuncinas, OBG’s managing editor for Asia, said that ‘The Report: Myanmar 2015’ covered a wide range of sectors such as trade and investment, financial services, energy, telecoms and IT, construction and real estate, agriculture and forestry, mining, industry and retail, health and education, transport, tourism, tax, and legal framework.

The report includes interviews with President Thein Sein, ministers and senior government officials, famous local business people, and key foreign investors. Contributions have also been made by the Parami Energy, Win Consulting Limited and the law firm Kelvin Chia Yangon Ltd. The publication, produced in cooperation with the Myanmar Investment Commission, is now available in print or online.

 

President Thein Sein noted agriculture as the mainstay of Myanmar in an interview with OBG. He was quoted as saying in the report, “We have focused on agricultural development, which can bring about poverty alleviation, rural development and generate incomes through microfinance, the right to land holding, irrigation, quality seeds and agricultural mechanisation.”

 

He also underscored the importance of education in the nation’s sustainable development.

 

“With our strong belief that education is one of the main drivers of the economy in the 21st century, we have also been implementing an educational reform process,” he said, adding that the government is attempting to raise educational standards under the comprehensive education sector review and national development plans.

 

The president also noted the importance of infrastructure building.

 

“Myanmar shares borders with some of the fastest-growing economies in the world, and increasing capacity and connectivity is vital to the sustainable development of our nation. Various capacity building initiatives are under way and can be seen across the nation in the form of telecom towers, new ports and special economic zones,” he was quoted as saying in the report.

 

This year’s report also highlighted Myanmar’s emerging banking sector, which Kuncinas describes as the most compelling investment proposition for international investors looking at growth potential.

“Until recently Myanmar had the lowest credit penetration of almost any country in the world with access to finance severely limited by regulation, technology, liquidity as well as sanctions. Now all that is changing very fast,” he said.

Kuncinas added that while much is still needed to be done before the sector could become a driver of broad economic growth, real change was already yielding results, boding well for current lenders and prospective players.

“Bank deposits and credit have been growing at more than 30 per cent a year, even after adjusting for inflation,” he said.

Tony Picon, president of the British Chamber of Commerce Myanmar, said at the launch of the report that the awarding of foreign banking licences is a positive step in the reform of the financial system.

“This will facilitate investment in the country by improving access to credit for international companies and raise standards across the entire banking sector,” he said.

As part of its financial services contents, the report included a roundtable with three bankers who have won the preliminary licence approval by the Central Bank of Myanmar -- ANZ Bank’s CEO of international and institutional banking Andrew Geczy, Bangkok Bank’s president Chartsiri Sophonpanich, and Maybank’s group president and CEO Abdul Farid Alias.

 

On their upcoming activities in Myanmar, Chartsiri said, “For our new branch, we will employ local staff and repatriates, and up-skill them by providing training programmes tailored to local needs. We will be recruiting from local universities and offering scholarships to promising Myanmar students.”

 

Chartsiri added that Bangkok Bank will provide structured intra-bank mentoring

programmes that pair promising local hires with experienced managers that can help groom them into the firm’s future leaders, in addition to sharing their knowledge and expertise with Myanmar banking executives and personnel.

 

Alias said that Maybank has conducted various training sessions in the country to share our knowledge on banking areas such as transaction banking, global markets, risk management, human resources and business excellence. In September 2014, the bank launched the Maybank Internship

Programme to train and develop young Myanmar talents.

 

Geczy said that Myanmar needs to be supported by the entire financial ecosystem including local and foreign banks, debt capital markets, pension funds, infrastructure funds and equity capital markets. He considered the award of foreign bank licences as a milestone step in the right direction.

 

“Local financial institutions have limited capacity to lend, as they currently rely exclusively on local deposits as their source of funding. Their capital bases are also low which means they will not be able to service such significant FDI and trade flows on their own,” he was quoted as saying in the report.

 

In addition to the three licence winners, the report included an interview with Lim Cheng Teck, CEO for Asean of the UK’s Standard Chartered Bank.

 

Teck noted that more financing options are essential to ensure that small and medium enterprises (SMEs) remain competitive in a post-AEC scenario.

 

“SMEs in many countries are also not fully aware of the opportunities arising from integration… On the part of banks themselves, there is a need for a continued effort to develop more advanced ways to assess SME credit worthiness and create more risk-based approaches in financing viable SMEs,” he said.

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