Investors face big obstacles, seminar

  These include ineffective implementation of reforms, the reluctance of some Burmese people to respond to those reforms, lack of flexibility in financial regulations, and insufficient human resources.

 Thinn Htut Thidar, chief executive officer of Universal Link Services, a Burmese business consultancy, yesterday said during a seminar titled “Doing Business in Myanmar – Opportunities and Challenges” held by Colliers International, Universal Link Services and The Nation that Burma was changing and upgrading to the same level as other Southeast Asian countries. Many foreign concerns are looking to invest there. The country’s strengths are the potential for power-generation projects and plentiful natural resources such as oil and gas, coal and timber.
However, she said the country still had weaknesses that foreign investors should consider. The difficulty in implementing reforms is one important issue. Burma closed its doors for 50-60 years, and its people have no experience in developing their economy, and some are reluctant to change. Meanwhile, the human resources to implement the reforms are also deficient. Thus the economy may not grow as fast as foreign investors expect.
She said out-of-date financial regulations were another obstacle to doing business in Burma. The currency exchange still fluctuates wildly. The government is, however, in the process of improving financial laws so that the system can facilitate foreign investors.
The weak provision of information to investors is also a concern. The cost of getting information is very high, while the channels to reach it are not easy. The accuracy of information is also questionable.
Meanwhile, the development of the private sector is still below average. Small and medium-sized enterprises lack support from the government to penetrate overseas markets. Sources of capital for them are also a concern.
“Although Burma has a potential market of 60 million people, and the country has links to big countries such as China and India … the market is not developed enough. Pricing is a priority concern for Burmese, not quality,” Thinn Htut Thidar said.
Paradorn Kunkongkaphan, managing director of MK Group, a business unit of Sahapat Group that has run a retail business in Rangoon for 20 years, said the company experienced steady growth of 5-10 per cent a year until 2008. As Burma has begun to liberalise, the company’s revenue has grown by about 50-100 per cent since 2008. This is an optimistic sign that Burma’s economy is growing in a positive way.
However, some obstacles such as weak logistics transport and currency fluctuations need improvement.
“We’ve witnessed Burma for years and see that it is growing under the same pattern as Vietnam and China,” he said. “We still see a bright future in this market.”
U Than Lwin, deputy chairman of KBZ Bank, the largest bank in Burma by assets, branches and customers, said the Burmese government was improving the financial laws to facilitate businesses. Besides, the country is welcoming more foreign financial institutions to set up here. It expects that some offshore banks may be allowed to set up the business by 2015.