Japanese investors are worried about labour shortages at the Thilawa Special Economic Zone, a senior official with the Japan External Trade Organisation said at the Sedona Hotel on March 18 after a forum aimed at promoting investment in the SEZ.
Singapore-based consortium Creative Professional Group has won a hotly-contested tender to act as consultant for the Kyaukphyu Special Economic Zone, it was announced in Yangon on March 3.
The Telecom sector will attract the largest portion of foreign direct investment (FDI) in the fiscal year 2014-2015, according to U Aung Naing Oo, Director General of the Directorate of Investment and Company Administration (DICA), which is part of the Ministry of National Planning and Economic Development.
THE Ministry of National Planning and Economic Development announced December 29 that three new branches of the Directorate of Investment and Company Administration (DICA) would open across Myanmar in 2014.
For many potential foreign investors the outcome of Myanmar’s elections in 2015 will determine if the country is firmly on the path of democratization, but Dutch firm Royal Haskoning DHV has no such reservations.
The engineering and project management consultancy was one of the first to return to Myanmar as part of an unofficial Dutch trade mission in December 2011; it has since worked on a host of projects in the country and established a permanent office in Yangon earlier this year.
Martijn Coopman, the company’s director Ports & Waterways Southeast Asia, remembers the warm welcome he received during his first visit in 2011.
“The Minister of Transport told me he was still using our World Bank-funded report on the Ayeyarwady River written in 1986. He immediately asked if we could provide him an update.”
Mr Coopman said Royal Haskoning DHV had good reasons to return to Myanmar relatively early.
“We carefully studied the dynamics of the local situation and concluded that the reform process seems irreversible,” he said.
“Myanmar aspires to be a full member of the international community again and has enormous growth potential. We want to facilitate growth by assisting both newcomers and local companies alike to develop their projects.”
In a similar manner the Dutch firm contributed to the re-development of Vietnam after it opened up in the late eighties. “We started with river and river transport projects, followed by designing and building ports and industrial plants,” Mr Coopman said.
“Currently our team in Vietnam comprises of 250 staff, most of them local engineers whom we trained ourselves. This is what we want to do in Myanmar as well: bring know how, train people and help Myanmar develop.”
For the past 18 months, Royal Haskoning DHV has been involved in terminal feasibility studies, designs for new industrial plants and logistics warehouses. A masterplan for a new deep sea port was prepared while the construction management of a new brewery and an oil terminal in Yangon will start in the coming months. Construction on a logistics hub near Mandalay will also begin soon.
Royal Haskoning DHV will not be the last Dutch company to enter Myanmar. In November Dutch Foreign
Trade Minister Liliane Ploumen visited and opened a Dutch Economic Mission. She was accompanied by a trade delegation that included East West Seed, electronics giant Philips, consumer goods multinational Unilever, and brewer Heineken, which left the country in 1997, much to the dismay of the government and beer consumers.
All four companies recently announced plans to open facilities in Myanmar.
Philips has already signed distribution deals with Pahatma Group, JJ-Pun and Power Light. It has also formed a partnership with the Yangon City Development Committee and conservation group, the Yangon Heritage Trust, to improve the lighting of the city’s historic buildings. Philips recently upgraded the lighting at Yangon’s historic Mahabandula Garden, in the city center near the Sule Pagoda.
In most developing countries corporate social responsibility is near the bottom of the list of priorities, but Mr Coopman feels Royal HaskoningDHV can bring another flavour to the table.
“Providing knowledge and training local engineers is the most sustainable form of assistance thinkable,” he said.
“Through the Myanmar Engineering Society we recently sponsored training courses in Japan for three Myanmar students. To add to that we are offering internships at our regional offices. Our local representative Zaw Naing is also working on a number of CSR-related committees. You could say CSR is an integral part ofeverything we do.”
In a recent press release Mr Coopman said Myanmar was not an easy country in which to operate, but was quick to add that doing business in the “Golden Land” was not too different from other Southeast Asian countries.
“Our clients demand flexibility and speed of delivery. Local presence is a must, advising from a distance [is] not acceptable. At the same time, the legal context is fluid. Laws are currently being rewritten and aligned with those in the rest of Southeast Asia. This process will take time,” he said.
The World Bank included Myanmar in its ‘ease of doing business’ ranking for the first time this year: out of 189 countries Myanmar was ranked 182nd.
The ranking highlights the challenges facing the country and Mr Coopman said there was no doubt the civil service was having difficulty coping with the pace of change, but added: “It must be said that there’s certainly no lack of goodwill.
“It still makes a big difference if local colleagues help you navigate through the government apparatus to obtain registrations and permits,” he said.
“Overall things are improving every day, although I expect the shortages in electricity, internet capacity, affordable housing, and infrastructure to become worse, initially, with the expected influx of new investment after the 2015 elections.”
“It will be a bumpy ride before this great country becomes an economical force in the region. But the potential is definitely there.”