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by Prema Nakra, Ph.D.
Myanmar sits at the crossroads of Asia's great civilizations of India and China, but the country was largely isolated because of four decades of communist rule. Myanmar's recent opening up means that for the first time in more than 50 years foreign government officials, businesses and tourists have an opportunity to visit and explore the country without censorship or restrictions.
In my first article of this series, I provided a brief background on the changes in Myanmar that opened the country to much of the rest of the world. In this article, I discuss the opportunities that are available to the country and the companies that choose to do business here.
Myanmar is located at the crossroads between Bangladesh, China, India and Thailand. These countries are a home to more than 40% of the world population offering a huge potential market for manufacturing and marketing consumer and business products and services. Myanmar's economy will grow an estimated 6.5% next year, placing it among Southeast Asia's fastest growing economies. According to World Bank reports, the country's economic growth will be driven by energy and commodities exports, foreign investment, services and construction. Myanmar is coming out of the shadows with regulatory and legislative reforms and privatization. The country is gearing up to claim its rightful place by creating a value proposition based on legislative reforms, natural resources, extensive low cost labor, and a large consuming population with pent-up demand for products and services.
Regulatory Environment
Since five decades of military rule ended in 2010, Myanmar has introduced new laws to promote domestic and foreign investment. These laws include Special Economic Zones, reforms in tax laws, ratification of new tax treaties and new foreign investment law. The country's foreign investment law allows 100% ownership by private enterprises. Since 1989, the country has privatized a series of industries including a large-scale privatization effort in 2009-2010 in which more than 300 enterprises including a major airline, ports, mines, factories, hotels, cinemas, gas stations, land and building were privatized. The country has a set of anti-corruption laws and since as early as 1948, corruption is officially a crime that can carry a jail term. Myanmar is already a member of the World Trade Organization and the Association of Southeast Asian Nations (ASEAN), which may evolve into a strong economic community in the coming decade.
Competitive Advantage
Myanmar, the second largest Southeast Asian country after Indonesia, is rich in natural resources, the majority of which remain untapped. It has abundant natural gas reserves, oil, precious and semi-precious stones, a large area of arable land, forestry, minerals of many varieties, and freshwater and marine resources. It accounts for 90% of the world's jade production and is among the top producers of rubies and sapphires. With a population of approximately 60 million, the country offers an easy availability of low labor costs. It has a large working age population available at a cost of about $3 a day compared to $4 in Indonesia, $5 in Vietnam, and $18 in China and Thailand.
Multinational Corporations Reenter Myanmar
Myanmar is open for business and offers opportunities in multiple industry sectors including infrastructure development, construction, information and communications technology, education, healthcare, tourism, banking and retailing. Global marketers are eyeing new growth in this Southeast Asian nation since it ended authoritarian policies that had led to sanctions from western countries.
Myanmar's post-2011 economic liberalization has left many salivating over potential business opportunities in the Land of the Golden Pagoda. With projected GDP growth of 6.5% in 2013, and projected GDP growth of 6.8% in 2014, Myanmar has one of the fastest growing economies in the world. As per World Bank reports, foreign direct investment in Myanmar had risen to US$2.7 billion in 2012-13 from $1.9 billion in 2011-12. Most of that investment went into the country's energy, garment, information technology, and food and beverages sectors.
Many well recognized multinational corporations that exited Myanmar when sanctions were imposed have reentered Myanmar:
Coca-Cola was the first to announce its intention to reenter Myanmar and Pepsi-Cola soon followed. In fast moving consumer goods (FMCG) category, Unilever unveiled plans to establish a local company in this market.
Heineken N.V. reentered Myanmar after a 17 year absence. It plans to build a $60 million brewery near the capital city of Yangon that will begin making and selling beer brands including Heineken by the end of 2014.
WPP Plc, the world's largest communication services company, has restarted its Myanmar operations after exiting the Southeast Asian country in 2003 because of sanctions.
ABD, which has not had operations for more than 20 years, opened an office in the country.
Seventeen foreign banks have already established representative offices in Myanmar. Credit companies, Visa and MasterCard, have formal joint ventures with Myanmar banks. Many international banks are in the process of establishing a foothold in Myanmar. For example, ANZ, Standard Charter, Bank of Tokyo-Mitsubishi, Japan's Mizuho and Sumitomo Mitsui Banking Corporation (SMBC) are entering Myanmar.
Professional services firms including Price-Waterhouse-Coopers and KPMG have already opened offices in the country. Ernst & Young also plans to open them.
Large multinationals including General Electric and Caterpillar as well as many large companies from Japan, Korea, Europe and other markets have begun selling their products in Myanmar.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| LBHT40A-2LS bearing | 40 | 62 | 80 |
| LBHT30A-2LS bearing | 30 | 47 | 68 |